Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Sidney Dye, esquire, Member for Norfolk, South-West, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — NATIONAL FINANCE

Income Tax (Schedule A)

Mr. Page: asked the Chancellor of the Exchequer if he will terminate the inequality in tax burden between the owner-occupier of a residence elevated upon wheels and the owner-occupier of a residence the foundations of which are immobile.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): I have noted my hon. Friend's suggestion.

Mr. Page: Is not it another of the anomalies under Schedule A tax that the owner-occupier of, for example, a residence costing £500 should have to pay tax and the owner-occupier of, for example, a caravan costing perhaps £1,000 should get off scot-free? Will my right hon. Friend look into this or possibly do away with Schedule A tax altogether?

Mr. Amory: As to the first part of my hon. Friend's supplementary question, I will certainly look into this, as I will into any other point which is relevant to this Question that he cares to raise with me.

Mr. Barter: asked the Chancellor of the Exchequer what steps are taken by the Inland Revenue authorities to draw the attention of the taxpayer to his right,

in certain circumstances, to claim relief from Income Tax, Schedule A, on the sums expended on maintenance of his property, fire insurance and management where those exceed the statutory repairs allowance.

Mr. Amory: Attention is drawn to this relief in the notes accompanying demands and receipts for Schedule A tax, Income Tax return forms and Pay-As-You-Earn coding notices.

Mr. Barter: Will my right hon. Friend bear in mind that it appears that between one-tenth and one-twelfth only of owner-occupiers make any claim in this connection? Will he bear in mind the need to draw attention to the entitlement to make this claim so that the other owner-occupiers, who are paying about £34 million a year in tax, may have an opportunity to secure some relief?

Mr. Amory: There is no guarantee that they would secure any relief, because that would depend on the circumstances. I think that the notices which are included are very adequate to the purpose.

Mr. Page: asked the Chancellor of Exchequer upon what principle maintenance claims against Schedule A Income Tax liability may include wall covering, for example, repapering, but not floor covering, for example, renewal of linoleum, liquid or otherwise.

Mr. Amory: I take it that my hon. Friend is referring to claims made by owner-occupiers. The principle is that the expenses which are admissible are those which are incurred by the owner-occupier as owner and not those which he incurs as occupier. The detailed application of this rule in cases of dispute is a matter for the General Commissioners of Income Tax.

Mr. Page: Does not this rule show the out-of-date nature of Schedule A tax altogether? Is not it a fact that in modern dwellings floor coverings are just as usual and as common as wall coverings? Will my right hon. Friend look at the rule again in present circumstances?

Mr. Amory: I do not think that is necessary. It is just a question of what would normally be a landlord's


responsibility and what would normally be a tenant's responsibility, and that is precisely the line we try to draw.

Mr. Page: asked the Chancellor of the Exchequer if he will permit the allowance in maintenance claims against Schedule A Income Tax liability of a reasonable sum for labour when the owner-occupier himself carries out the repair work.

Mr. Amory: No, Sir; only actual expenditure can be allowed.

Mr. Page: Is not this grossly unfair to the person who tries to save money by doing his own work in the house? Does not it benefit the person who has the money and can afford to pay for it to be done?

Mr. Amory: No, I do not agree with my hon. Friend. The point here is what the man actually has to pay for.

Mr. Jay: If the income itself is taken in real terms as liable to taxation, surely the maintenance in real terms might be included also?

Purchase Tax

Mr. Nabarro: asked the Chancellor of the Exchequer whether he is aware that anticipation of substantial Purchase Tax reductions, also of further measures of simplification of the tax, to be included in his April, 1959, Budget, will cause prospective buyers of many items, notably motor cars and television and radio sets, taxed at 60 per cent., to postpone purchases until after Tuesday, 15th April, 1959; and, in view of trade dislocation, withholding of orders by the distributive trade to factories, and the consequential danger of increased short-time working and unemployment thereby resulting, whether he will effect all intended Purchase Tax reductions, and no increases, on 1st January, 1959, instead of in his April, 1959, Budget.

Mr. Amory: I must refer my hon. Friend once again to the reply I gave to the hon. Member for Barnsley (Mr. Mason) on 18th November.

Mr. Nabarro: But is not mounting winter unemployment, often wrongly described as seasonal unemployment, in the first quarter of every year, now most largely due to uncertainties in connection with Purchase Tax changes? Is not

it a fact that my right hon. Friend the Home Secretary when he was Chancellor of the Exchequer, in order to avoid these disruptions in industry, made his announcement of Purchase Tax changes early in the new year? Will my right hon. Friend follow that admirable precedent?

Mr. Amory: I doubt whether uncertainty over Purchase Tax is, as my hon. Friend implies, the main factor or even one of the chief factors in the seasonal unemployment.

Mr. Nabarro: asked the Chancellor of the Exchequer whether he is aware that the yield of Purchase Tax has increased from £290 million in 1950–51, representing some 7 per cent. of total revenue of approximately £4,000 million, to over £490 million, representing nearly 10 per cent. of total revenue in 1958–59 of approximately £5,000 million; and whether he will now state on what grounds he considers it justifiable to obtain such substantially larger proportion of the revenue by means of Purchase Tax, having regard to the inflationary effects of this increase.

Mr. Amory: As regards the first part of the Question, my hon. Friend has exaggerated the increase in the Purchase Tax yield as a proportion of total revenue. As regards the second part, I am aware of my hon. Friend's views, but he will not be surprised if I do not agree with him.

Mr. Nabarro: There is always room for disagreement in these matters. Would not my right hon. Friend concede the accuracy of the fact that last year he collected £494 million in Purchase Tax, that this year he Budgeted for £491 million in Purchase Tax, and that, pro rata, for the first seven months of this year, converted to the full current year, he will actually gather in £520 million in Purchase Tax, or £2 million per working day out of the wage earners' pay packets? Surely he ought to do something about that.

Mr. Amory: I limited myself to pointing out the inaccuracy in the figures which my hon. Friend included in his Question, and I must urge him, if he wishes to score as many goals as I know he would like to do in the next few months, to concentrate on accuracy.

Mr. Jay: Is not the hon. Member for Kidderminster (Mr. Nabarro) this time quite accurate in saying that the present Government are raising in Purchase Tax £200 million more than the Labour Government and a total tax revenue of £1,000 million more?

Mr. Amory: I am only expressing the hope that my hon. Friend will always be accurate.

Mr. Nabarro: May I ask a further supplementary question, Sir? [HON. MEMBERS: "No."] It is a very short one. Would my right hon. Friend refer to the Report of O.E.E.C., published 48 hours ago, urgently stressing the need for further Purchase Tax reduction?

Mr. Amory: I am aware of the Report to which my hon. Friend refers.

Mr. Nabarro: asked the Chancellor of the Exchequer for what reason valve replacements for radio sets and cathode ray tubes for television sets are subject to Purchase Tax at 60 per cent., whereas spare parts, for example sparking plugs, for other articles, subject to purchase tax at 60 per cent., for example motor cars, are not so liable; and whether he will correct this anomaly at an early date.

Mr. Amory: For revenue reasons. Quite different considerations arise in the case of spare parts for vehicles.

Mr. Nabarro: I am a practical man, Sir. Is not it the fact that a sparking plug makes a motor car go, that a cathode ray tube makes a television set go and that a valve makes a radio set go? As all these are essential spare parts, why should my right hon. Friend be so predatory in taking 60 per cent. Purchase Tax on radio valves or cathode ray tubes and nothing on sparking plugs for motor cars? Surely he should be practical, reasonable and equitable in all these matters?

Mr. Amory: I think my hon. Friend rather over-simplifies things, as he sometimes does. A sparking plug is not the thing that makes a motor car go, but one of the things that makes a motor car go. As a practical man, I think he will know the difference between a cathode ray tube and a sparking plug, and between a radio set and a motor vehicle.

Mr. H. Wilson: Can the right hon. Gentleman explain to us why this practical man last year did not vote with us in the Division Lobby for the reduction of the 60 per cent. Purchase Tax on cathode ray tubes?

Mr. Amory: My hon. Friend is far too practical a man to vote in the Lobby with the right hon. Gentleman.

Mr. Speaker: Mr. Philips Price.

Mr. Woodburn: On the human side of this matter, is the Chancellor aware that both the Purchase Tax—

Sir A. V. Harvey: On a point of order. Is not it a fact that before the right hon. Gentleman asked his Question, you called the hon. Member for Gloucestershire, West (Mr. Philips Price)?

Mr. Speaker: Yes, but, before the hon. Member rose to ask Question No. 8, the right hon. Gentleman got up to ask another supplementary question.

Mr. Woodburn: I am sorry, Mr. Speaker, but my question will be a very short one. Is the right hon. Gentleman aware that both the Purchase Tax and the high price of cathode ray tubes prevent a very large number of people of humble means from enjoying this very important contribution to modern life?

Mr. Amory: I will take into consideration, when considering my taxation proposals, the point the right hon. Gentleman has made.

Mr. Frank Allaun: asked the Chancellor of the Exchequer if, in order to reduce the cost of living, the unemployment in the wool textile and clothing industries, and the recently-created tax anomalies, he will consider removing the Purchase Tax on wool cloth.

Mr. Amory: I removed the tax on wool cloth in my last Budget. Tax is charged at 5 per cent. on clothing made of wool.

Mr. Allaun: Is not it grossly anomalous that if a customer buys a suit length and takes it to his tailor, no tax is payable, yet if he buys a suit length from the same tailor—his own tailor—tax is payable, both on the material and on the making-up charge? Is not that a daft idea? Will the Chancellor before


April consider removing this tax, particularly in view of the heavy unemployment in these industries?

Mr. Nabarro: That is just the point I was making.

Mr. Amory: The change was made last year at the request of many organisations representative of the trade in order to reduce anomalies. Again, I will certainly bear in mind the points which the hon. Gentleman has made.

Mr. H. Wilson: Would the Chancellor agree that the anomalies created by only half taking off the tax were not introduced at the request of the trade, and that we produced many items of evidence to suggest that it would create more anomalies? Secondly, is he aware that one of his predecessors, the Lord Privy Seal, refused to take the tax off cotton goods until after the date of the 1955 General Election was announced, and said that it would be dishonest to do so? May I ask the right hon. Gentleman, if he is going to do anything about this, to do it now, in order to remove uncertainty and unemployment in the trade, and not wait until a pre-election Budget?

Mr. Amory: I will take into consideration the points which the right hon. Gentleman has raised.

Mr. Nabarro: My Question was non-political, not like the last one.

Mr. Gower: asked the Chancellor of the Exchequer if he is satisfied that the higher rates of Purchase Tax are not limiting the ability of many industries to increase their exports; and if he will review these rates.

Mr. Amory: I shall be reviewing the whole field of taxation at the appropriate time; my hon. Friend must not expect me to comment on particular aspects now.

Mr. Gower: Has there not been all along a singular reluctance by the Treasury to admit that a virile, expanding export industry cannot export without a large domestic industry as well?

Mr. Amory: May I add that there is also a continuing responsibility on the Chancellor of the Exchequer to ensure that he raises the requisite amount of revenue?

British Publications, Middle East and Southern Asia

Mr. Philips Price: asked the Chancellor of the Exchequer whether, in view of the almost complete absence of British books and publications from countries with balance of payment difficulties such as some in the Middle East and Southern Asia, he will consider means by which a limited amount of sterling currency would be available to meet such conditions.

Mr. Amory: I would refer the hon. Member to the general statement on the Government Information Services by my right hon. Friend the Chancellor of the Duchy of Lancaster on 3rd November.

Mr. Price: Is it a fact that certain countries with balance of payments difficulties are literally without any English books or publications, particularly countries like Turkey and Pakistan? Since this is a very serious matter, cannot the Chancellor do something more than refer me to a Question which was answered some time ago?

Mr. Amory: I think that Answer was very relevant, but the problem which the hon. Gentleman raises is a serious one, and it is one to which attention is being given. My right hon. Friend pointed out that that precise aspect of the problem, with others, is at present under consideration, and that he will be making an announcement in due course.

Post-war Credits

Mr. Gower: asked the Chancellor of the Exchequer if he will take steps to pay interest at 5 per cent. per annum in respect of post-war credits not repaid after 1st January, 1959.

Mr. Amory: I regret that I cannot see my way to adopting my hon. Friend's suggestion.

Mr. Gower: Is not this a reasonable suggestion, in view of the fact that these forced loans have now subsisted for about 17 years, and would not it be fair to these people who have had to wait so much longer than those who have already been paid?

Mr. Amory: I will continue to take into consideration my hon. Friend's views.

Vice-Admiral Hughes Hallett: asked the Chancellor of the Exchequer


whether he will consider authorising the purchase of the right to post-war credits within five years of their maturing by the banks or by other authorised financial institutions.

Mr. Amory: No, Sir. I could not undertake to introduce an arrangement of this sort.

Vice-Admiral Hughes Hallett: Is my right hon. Friend aware that that is a rather disappointing Answer for some people? What would be the objection to an arrangement of this nature, bearing in mind that in France, for example, similar debts of individuals are sometimes paid in the form of post-dated bonds?

Mr. Amory: It would be very difficult to do administratively. Every one of these claims before it is effective has to be checked in detail. It would create more rigidity and make it more difficult for the Government to change the conditions for repayment if we found ourselves able to do so, for example, by advancing the age for repayment.

Mr. E. Johnson: asked the Chancellor of the Exchequer if he is aware that £9 million has been paid out in cases of hardship to doctors in advance of their retirement under the National Health Service scheme for compensating doctors for the loss of the right to sell the goodwill of their practices; and if he will adopt similar criteria for judging hardship in order to repay post-war credits in cases where such hardship exists.

Mr. Amory: I regret that my hon. Friend's suggestion would not provide a satisfactory basis for repayment of postwar credits.

Mr. Johnson: Is my right hon. Friend aware that many hon. Members are trying to help him in his difficulty of defining hardship? Would he say in what way the standards adopted by his Department differ from those adopted by the Ministry of Health and by the National Assistance Board?

Mr. Amory: In the case of doctors the circumstances are very different. It is a question of interpreting hardship in a very much narrower field than in these cases. I think that summarises the difficulties.

Mr. Fitch: asked the Chancellor of the Exchequer, in view of the fact that the expectancy of life of women is

greater than that of men, whether he will consider paying post-war credits to men at the age of 60 rather than at 65 years.

Mr. Amory: I will bear the hon. Member's suggestion in mind.

Mr. Fitch: Would the Chancellor of the Exchequer agree that the present position is illogical? In view of the fact that men are generous by nature, would not both men and women benefit by reduction of the age of payment?

Mr. Amory: I certainly subscribe to the attribute that the hon. Gentleman applied to men, but I would remind him that the qualifying ages are not based on expectancy of life.

Mr. Fitch: asked the Chancellor of the Exchequer if he will now reconsider his decision not to pay Mr. T. Yates, 83, Victoria Street, Newtown, Wigan, his post-war credits.

Mr. Amory: No, Sir. Mr. Yates has not reached the qualifying age, and I have no power to authorise repayment in his case.

Mr. Fitch: Is the right hon. Gentleman aware that this is a very distressing case, that this man has worked in the mines for 36 years, has contracted lung disease and has been unable to work for the last 11 years? Does not he think this is the sort of case where repayment is due?

Mr. Amory: I agree with the hon. Gentleman that this clearly is a distressing case. The difficulty that all Governments have found is that of drawing the line. There are so many distressing cases that it is difficult to define when a case ceases to be distressing. I have explained how unhappy I am not to be able to meet cases like that. I am once again looking into the position to see whether it is possible to devise any system where lines can be drawn sensibly and satisfactorily, but I am not hopeful.

Common Market and Free Trade Area

Mr. Cronin: asked the Chancellor of the Exchequer if he will investigate the prospects of forming a closer economic union with Switzerland, Austria, Norway, Denmark, and Sweden, having regard to the circumstance that the first common market tariff cuts and quota enlargements are due to be made on 1st January.

The Paymaster-General (Mr. Reginald Maudling): I do not think I could usefully add to my reply to the hon. Member for Pembroke (Mr. Donnelly) on 18th November.

Mr. Cronin: Bearing in mind that the prospects of agreement on a European Free Trade Area have now receded severely, would not the arrangements suggested in the Question at least partially cover the right hon. Gentleman's nakedness in the conference room?

Mr. Maudling: I am sorry that the hon. Gentleman is concerned about my nakedness. So far as his Question is concerned, the Government still believe that something like the Free Trade Area is still the best line for Europe.

Mr. Jay: asked the Chancellor of the Exchequer what offers have been received from the countries of the European Economic Community to extend voluntarily to the proposed free trade area countries the tariff reductions to be made on 1st January under the Rome Treaty; and what reply Her Majesty's Government gave.

Mr. Maudling: The Six made known their intentions to the O.E.E.C. yesterday. The matter will be before the O.E.E.C. Council of Ministers when it meets, probably next week.

Mr. Jay: Is the Paymaster-General aware that distinguished representatives of the Community have been saying privately for some time that an offer was made as long ago as last July to the British Government to extend these cuts on 1st January, and that it was turned down by the British Government? If that is not true, as is believed by many people, will the right hon. Gentleman deny it?

Mr. Maudling: I am glad to have the opportunity of saying that it is totally untrue, because the only thing that happened in July was that it was suggested by the European Community that the idea of a provisional agreement might be considered, but no proposals were made. At that time it was felt by the Govern-merits concerned that it would be premature to consider a provisional agreement. In fact, when we met last October the question was again raised, and the representatives of the Six still said that it was premature.

Mr. Jay: If this offer is still open for 1st January, what is Her Majesty's Government's attitude to it?

Mr. Maudling: I have explained that no such offer has ever been made. A proposal reached the O.E.E.C. yesterday which will be considered, I hope, next week.

House Purchase (Loans)

Mr. Jay: asked the Chancellor of the Exchequer why local authorities are charged a higher rate of interest than building societies for 20-year loans of public money for house purchase.

Mr. Amory: I would refer the right hon. Member to my reply of 2nd December to the hon. Lady the Member for Liverpool. Exchange (Mrs. Braddock).

Mr. Jay: Is the right hon. Gentleman aware that he told me in an Answer on 20th November that, through the Public Works Loan Board, he charges a rate of 5⅞ per cent. for 20 years on a loan for house purchase to local authorities, and that in the White Paper he proposes to charge only 5½ per cent. for the same purpose to building societies? How does the right hon. Gentleman justify that difference?

Mr. Amory: It is difficult to compare loans which are raised on fixed interest terms and loans where the interest rate is variable. It is difficult to say how this proposed scheme would work out over the years. We do not know the current rates that will be charged under the Public Works Loan Board system, nor the current rates to be charged in respect of building societies.

Mr. Jay: Does that justify this discrimination? Will the right hon. Gentleman look at the matter again and see whether he can get the two rates into line?

Mr. Amory: We shall be discussing this point later on the Bill.

Mr. Osborne: Can my right hon. Friend hold out reasonable hopes that both rates will come down in the near future?

Mr. Amory: My hon. Friend knows that the Public Works Loan Board rate is linked with the current rate in the market for local authority borrowing and


so is dependent upon the current rate in the market.

Mr. H. Wilson: Is the implication of the Chancellor's argument about fixed rates and variable rates that the prospect over the years is of rates even higher than these? Is that what he is looking to?

Mr. Amory: That is not the inference to be drawn from what I have said.

Motor Vehicles and Fuel (Taxation)

Captain Pilkington: asked the Chancellor of the Exchequer the percentage increase in the amount of annual revenue provided from motor vehicle and petrol taxation in 1958 compared with 1938.

Mr. Amory: The answer is 392 per cent.

Captain Pilkington: Does not my right hon. Friend think that that is an astonishing figure? Does not he think that the motorist should pay rather less in taxation?

Mr. Amory: The motorist, like everyone else, would like to pay rather less in taxation and, consistent with my requirement to raise the revenue, I would agree with my hon. and gallant Friend, the motorist and everyone else.

Mr. Prentice: asked the Chancellor of the Exchequer the estimated yield in the current financial year from licensed vehicle duty and fuel oil duty.

Mr. Amory: £100 million from motor vehicle duty and £345 million from the hydrocarbon oil duties.

Mr. Prentice: Would the Chancellor agree that the London Transport Executive is paying something like £5 million a year under these two headings and that is one of the reasons why it finds it necessary to cut bus services in the Greater London area, thereby causing grave concern to the public? In the circumstances, will he have a look at this matter to see whether the tax might be reduced in the next Budget?

Mr. Amory: I am afraid that without notice I cannot corroborate the accuracy of the figure the hon. Member has given, and I am not sure that I could do so even with notice. Of course, the duties form

one element in costs, but against that they bring in a large amount of revenue which I should find it difficult to do without.

Tax Revenue and National Income

Captain Pilkington: asked the Chancellor of the Exchequer the percentage of taxes compared to national income in 1951 and at the latest date in 1958.

Mr. Amory: Central Government revenue from taxation amounted to about 34½ per cent. of the national income in 1951 and 29 per cent. in 1957. I regret that comparable figures for 1958 are not yet available.

Captain Pilkington: Would my right hon. Friend agree that this is a very welcome sign of the success of Tory government?

Mr. Amory: I should be inclined to agree with my hon. and gallant Friend.

Mr. H. Wilson: Would the Chancellor also agree that the amount of taxation raised by the present Government has increased by 50 per cent. since 1951 and that if the national income had risen as much under the present Government as it did under the Labour Government, the percentage year by year of the national income going into taxation instead of this policy of stagnation would have fallen even more rapidly?

Mr. Amory: I am not inclined to agree with the right hon. Gentleman.

Distribution of Industry (Industrial Finance)

Mr. Jay: asked the Chancellor of the Exchequer whether he is aware that the insistence, as a condition of a Development Areas Treasury Advisory Committee loan, that alternative finance should not be available to a firm, is hampering the effectiveness of the Distribution of Industry (Industrial Finance) Act, 1958; and whether he will relax this condition.

Mr. Amory: No, Sir; the condition is laid down in the Act and I have no power to relax it. In any case, if capital can be raised on reasonable terms from normal commercial sources, there is no need for loans by the Treasury.

Mr. Jay: Does not the right hon. Gentleman realise that this has provoked a real difficulty because reputable firms who could get finance elsewhere find that there is no incentive, as a result of the Act, to go to these areas at all now that the building restriction is less effective? Will the right hon. Gentleman think over this problem because, in South Wales for example, it has been a deterrent?

Mr. Amory: I will consider the point that the right hon. Gentleman has raised. Under the Act the Treasury is a lender of last resort and not a lender of first resort.

Mr. G. Roberts: asked the Chancellor of the Exchequer how many applications for assistance under the Distribution of Industry (Industrial Finance) Act, 1958, have so far been received from Caernarvonshire; and how many have been rejected, accepted, and are still under consideration, respectively.

Mr. Amory: Three firm and eligible applications have so far been received from Caernarvonshire. All three are now under consideration.

Mr. Roberts: Does not that information bear out what my right hon. Friend the Member for Battersea, North (Mr. Jay) has just said, that this Act does not contain any real incentive to firms to come to areas like North Wales? Is the right hon. Gentleman aware that unemployment in Caernarvonshire is over 9 per cent., and is constantly increasing? Will he at least see that the appropriate committee deals with the utmost speed arid sympathy with all the applications which have been received?

Mr. Amory: I am sorry to hear the level of unemployment to which the hon. Member has referred. I can only give an assurance that every application made will be looked at as sympathetically and quickly as circumstances permit, but the hon. Member will understand that inquiries always have to be made after an application has been sent in.

Government Ministries and Civil Servants

Captain Pilkington: asked the Chancellor of the Exchequer whether he will give figures to show the difference at the latest available date in 1958 compared

with the same date in 1951 of the number of Government Ministries and the number of civil servants, respectively.

Mr. Amory: There are 23 Government Ministries now; there were 27 in 1951. On the 1st October, 1958, there were 632,316 non-industrial civil servants; on the 1st October, 1951, there were 685,447.

Captain Pilkington: Does my right hon. Friend agree that these figures are another striking example of Conservative success?

Mr. Amory: I entirely agree with my hon. and gallant Friend.

Mr. H. Wilson: Would the right hon. Gentleman say how much more rapidly we reduced the number of civil servants in the years after the war—[HON. MEMBERS: "Oh."]—yes, and the figures are on the record. If the argument is that we do not want people in allegedly un-productive occupations, would the Chancellor point out to his hon. and gallant Friend that this year alone the number of miscellaneous and other workers in non-productive occupations is increasing by 40,000?

Mr. Amory: I would remind the right hon. Gentleman that to run down an economy from a war-time to a peace-time administration is not the same as running it down over seven years of peace-time.

Building Societies

Mr. Maurice Macmillan: asked the Chancellor of the Exchequer why, in laying down the proportion of total assets held as free reserves by building societies in order to qualify for trusteeship status, he selected 1½ per cent. as the initial and 2½ per cent. as the ultimate minimum.

Mr. Amory: I would refer my hon. Friend to the Answer I gave to him on Tuesday, 2nd December, 1958.

Mr. Macmillan: Does not my right hon. Friend agree that it will be extremely difficult for building societies to raise their reserve ratio from 1½ per cent, to 2½ per cent. without either postponing a reduction in mortgage rates or even raising mortgage rates, or at least retarding their rate of growth?

Mr. Amory: I think the details can best be debated when we come to the Bill.

Museums and Galleries (Purchase Grants)

Dr. Stross: asked the Chancellor of the Exchequer to what extent under its revised constitution the Standing Commission on Museums and Galleries will be required to advise on the allocation of grants to museums and galleries; and what extension of the original terms of reference has taken place or is contemplated.

Mr. Amory: It will be open to the Standing Commission in future, as it has been in the past under its terms of reference, to advise on the purchase grants of the national museums and galleries. Its terms of reference are wide. No extension has taken place and I do not think any is called for at present.

Dr. Stross: With terms of reference as wide as these, is the Chancellor satisfied that the composition of the Standing Commission is such that there is enough special knowledge available of what is called the international art market?

Mr. Amory: I think so. I think the composition of the Standing Commission is very appropriate for the function it performs. I am very anxious that the Commission should have full scope for advising me on the important issues involved.

Mr. K. Robinson: asked the Chancellor of the Exchequer if he has yet reached any conclusion about the future level of purchase grants to the national museums and art galleries.

Mr. Amory: Not yet, Sir.

Mr. Robinson: May I take it that the Chancellor is now seized of the urgent necessity for a substantial increase in the grants and that all he is now considering is the amount of the increase? When may we expect a reply?

Mr. Amory: Answering the first part of the supplementary question, I am seized of the importance of this question and the wide interest which is taken in it. The hon. Member himself formed a part of the delegation which discussed this matter with me the other day and did his best to ensure that I was seized of the importance of it. In answer to the second part of his supplementary question I can only say, "As soon as feasible".

British Aluminium Company

Mr. H. Wilson: asked the Chancellor of the Exchequer when he expects to be in a position to make a further statement on the applications now before him relating to the British Aluminium Company.

Mr. Amory: I have no statement to make at present.

Hire Purchase

Mr. H. Wilson: asked the Chancellor of the Exchequer what estimate he has formed of the inflationary effects of the recent removal of restrictions on hire purchase.

Mr. Amory: I cannot put a precise figure on the increase in expenditure, but I have no reason to think that it will be so great as to produce any general excess of demand or generate an inflation in prices.

Mr. Wilson: Can the right hon. Gentleman say whether the Parliamentary Secretary to the Ministry of Fuel and Power was speaking with the Chancellor's authority or not when he said that if these present hire-purchase derestrictions continue they will lead to raging inflation? Is that the view of the Government and, if so, what are the Government going to do about it?

Mr. Amory: My view, as I have clearly expressed it, is that relaxations on hire purchase will prove useful and helpful in prevailing circumstances and will provide a useful stimulation which will not involve any excessive demand on the economy.

Mr. Wilson: While thanking the Chancellor for the repudiation of the Parliamentary Secretary—as such we must take it—inay I ask if he will make clear to his hon. Friend, when he has settled his other row with him about the statement he made the other day, that on hire-purchase derestriction the Chancellor thinks his action was right?

Mr. Amory: I am clearly satisfied that my action was right and I shall continue to account to the House for the working out of these policies. I am quite satisfied in the present circumstances that this step was useful, that it will prove helpful in providing employment in certain sectors of the economy where there was surplus capacity and that it will not involve an excessive demand.

Income Tax

Mr. McKay: asked the Chancellor of the Exchequer what total amount he estimates would accrue to the Treasury by increasing the Income Tax by 6d. at the standard rate and 3d. at the reduced rates; and what amount would accrue from each of these increases.

Mr. Amory: About £140 million, of which about £90 million is attributable to 6d. on the standard rate and about £50 million to 3d. on each of the reduced rates.

Mr. McKay: Instead of taking 6d. off Income Tax in April, would the Chancellor consider allocating some money as a supplement to the National Insurance Fund so that higher pensions may be paid?

Mr. Amory: I shall take note of what the hon. Member has suggested.

Mr. McKay: asked the Chancellor of the Exchequer the tax relief at present under the National Insurance Act for a married man with one child under 12 years with £7 per week, with £13 per week, and with £18 per week, respectively.

Mr. Amory: The Income Tax relief to a married man with one child under 11 years is nil. 11d. and 1s. 8d. a week, respectively.

Pension Contributions (Tax Relief)

Mr. McKay: asked the Chancellor of the Exchequer the estimated total tax relief to all insured persons in a full year under the new pension scheme arising from their contributions towards pensions in the combined scheme, including all those with incomes above £15 a week.

Mr. Amory: I regret this information is not available.

Watches (Ilbert Collection)

Mr. Deedes: asked the Chancellor of the Exchequer, in view of the approaches that have been made to him, what steps he has taken to secure preservation for the nation of the Ilbert collection of watches.

Mr. Amory: The British Museum Trustees recently applied for special assistance for several purchases to which they attach importance, including the

Ilbert watches. I have agreed to ask Parliament to approve a special grant of £50,000 towards these purchases. An issue from the Civil Contingencies Fund may be necessary and a Supplementary Estimate will be laid before the House in due course. It is for the trustees to decide how they will allocate the special grant between the purchases they wish to make.

Mr. Deedes: While acknowledging what my right hon. Friend has done in this matter, may I ask if he will bear in mind that something like £65,000 out of the total cost of £88,000 for this collection has been found through private sources, which is an exceptionally high total? Will he bear in mind the immense store which the industry, now making half of our watches and exporting about £2 million worth, sets by this collection? Will he make sure that we do not lose the collection if we can possibly avoid that?

Mr. Amory: The grant I have mentioned was a very substantial part of the grant for which I was asked. I should like to pay tribute to the generous help which is being provided to the trustees from private sources for this object. The actual allocation of the grant among the various bodies, as my hon. Friend agrees is a matter for the trustees.

Public Works Loan Board

Mr. Prentice: asked the Chancellor of the Exchequer what representations he has received from the Association of Municipal Corporations in favour of lower rates of interest for loans to local authorities from the Public Works Loan Board; and the terms of his reply.

Mr. Amory: I have not received any such representations from this Association.

Mr. Prentice: Is the right hon. Gentleman aware that at its September meeting the General Purposes Committee of the A.M.C. expressed the view that the Public Works Loan Board ought to give a lead to the money market by trying to bring the rates of interest down? In view of the need to encourage local authorities in constructive capital spending in a time of unemployment, should not he take this advice and bring down the Public Works Loan Board rates of interest?

Mr. Amory: As I have said, I have not received any representations to that effect from the body to which the hon. Member has referred.

Northumberland and Durham Cycle Traders' Association

Mr. Short: asked the Chancellor of the Exchequer why the hon. Member for Central Newcastle-upon-Tyne had to wait until 4th December for a reply to his letter dated 13th November on behalf of the Northumberland and Durham Cycle Traders' Association.

Mr. Amory: I fear that the large number of letters which my Treasury colleagues and I receive sometimes imposes a little delay, but I do not think the delay in this case was unreasonable.

Mr. Short: Does the Chancellor realise that if it takes as long as this to get an answer to a letter of this kind, that leads hon. Members to expect a more encouraging reply than the one received? Does not he think it a bit thick to have to wait for three weeks to be told that he will bear the matter in mind?

Mr. Amery: On many matters I cannot be as forthcoming as I should like to be.

Arts Council (Grants for Opera)

Mr. G. Jeger: asked the Chancellor of the Exchequer whether he has now concluded his discussions with representatives of the Arts Council and the Royal Opera House, Covent Garden; and whether he will make a statement on future grants for opera.

Mr. Amory: The amount devoted to opera from the Arts Council grant is a matter for the Arts Council and not for me. As to the level of the Arts Council grant for 1959–60, I must ask the hon. Member to await the Estimates.

Mr. Jeger: Is the right hon. Gentleman aware that the Government spokesman in another place on 27th November stated definitely that discussions are going on at this moment about the position of the Royal Opera House, Covent Garden? At the same time as London opera is being discussed with representatives of the right hon. Gentleman's Department, will not he discuss the position of the Carl Rosa Company with a view to getting more opera in the Provinces?

Mr. Amory: I think that the meeting to which the hon. Member refers was a meeting between the Covent Garden authorities and the Arts Council, at which two representatives of the Treasury were present as assessors.

Mr. H. Wilson: Is the right hon. Gentleman aware that it is not only on this side of the House but I am sure in all parts of the House and all parts of the country that there is a very strong desire that more should be spent on the arts? It is not good enough to say that we must wait for the Estimates, because we cannot amend the Estimates. Will the right hon. Gentleman bear in mind the need for doing what my hon. Friend said both in London and in the Provinces and for spreading out more widely in relation to provision for the arts generally?

Mr. Amory: I am certainly having a wealth of representations made to me on this subject, not all of them exactly in line with one another, but all having one common characteristic—in other words, involving higher expenditure.

American Gramophone Records (Matrices)

Mr. Chetwynd: asked the Chancellor of the Exchequer the dollar expenditure incurred in the import of matrices of American recorded music; what royalties are paid in dollars on records made from them and sold in the United Kingdom; and the dollar payment for performing fees when the records are broadcast.

Mr. Amory: Imports from America of matrices for the reproduction of gramophone records for the last twelve months were of the order of £18,800. I regret that no separate figures are available for royalties or performing fees paid in respect of their use.

Mr. Chetwynd: Is the Chancellor aware that the B.B.C. uses records made from these matrices to give over 80 per cent. American music in its recorded programmes? Is he aware that this causes a grave loss of dollars to us and also gives no encouragement to British composers and song writers? Could he take some steps to increase the use of British artists?

Mr. Amory: I am aware that the payment of royalties and rights involves a considerable sum of money in total, but


I am not at present of the opinion that there is anything unfair or unreasonable in the present arrangements.

Interest Rates

Mr. Cronin: asked the Chancellor of the Exchequer if, having regard to the present level of the gold and dollar reserve and to the imminence of a seasonally favourable period for sterling, he will expedite measures to lower interest rates in the United Kingdom.

Mr. Amory: As regards short-term rates of interest, the hon. Member will have observed that Bank Rate has been reduced by 3 per cent. in the last nine months. Future policy in this field will remain flexible. As regards long-term rates, I have nothing to add to what I told the hon. Member on 2nd December.

Mr. Cronin: Will the right hon. Gentleman bear in mind that by previous standards a 4 per cent. Bank Rate is a high rate of interest and that nobody will believe that he wishes to reduce unemployment while that high rate of interest continues?

Mr. Amory: All I can assure the hon. Member is that policy will continue to he adjusted to the needs of the changing situation. As for opinions on the changing of rates, I leave it to the hon. Member to decide that matter for himself.

European Free Trade Area

Mr. Cronin: asked the Chancellor of the Exchequer when the Government intend to publish a White Paper on the European Free Trade Area negotiations.

Mr. Maudling: As my right hon. Friend, the Home Secretary, told the House on 4th December, I have been considering this matter. I feel, however, that it would be difficult to publish a full and satisfactory White Paper at the present moment.

Mr. Cronin: As the inimical clauses of the Rome Treaty are due to take effect in a few weeks' time, does not the right hon. Gentleman appreciate that the need for a White Paper is urgent?

Mr. Maudling: I understand the point, but the trouble is that the negotiations and the documents are by mutual understanding confidential, and the Government could not make a unilateral move

to publish them. I will try to see whether I can do something about this.

Mr. H. Wilson: Does not the right hon. Gentleman recall that the main reason we were willing to acquiesce in postponing a debate on this subject was that we understood that it would be possible to issue a White Paper after 1st January but very difficult to issue one before that? Will he give an undertaking that we shall have a White Paper telling the House and the country as much as he can tell the House and the country in good time for the debate which we hope and intend to have after Christmas?

Mr. Maudling: I share the right hon. Gentleman's desire to give the House the greatest information on this matter, but there is the difficulty of the documents concerned being confidential by international agreement. I will do my best in the near future to try to ensure that the maximum amount is made public.

Mr. Wilson: If I send the right hon. Gentleman one of these confidential documents from the Continent which are floating about in this country, showing that he has misled the House this afternoon in the statement about the offer made by the Six, will he publish that in a White Paper?

Mr. Maudling: I should he grateful to receive any document, but I should be extremely surprised if any document which the right hon. Gentleman sent me made the point which he thinks he could make.

Mr. Woodburn: Since up to now so much has been given to the public to discourage any hope of a settlement, may I ask the right hon. Gentleman whether he has any hopes of this matter being settled at the meeting next week?

Mr. Maudling: These things can be settled if there is a general will to succeed in a settlement, but not otherwise.

Annuities (Transfer to Canada)

Mr. Mathew: asked the Chancellor of the Exchequer if he is prepared to allow the transfer of annuities owned by a constituent of the hon. Member for Honiton, of which particulars have been


supplied to him, to the Dominion of Canada so that he and his wife may now rejoin their family in Canada.

Mr. Amory: I am informed that my hon. Friend's constituent has already received from the Exchange Control authorities a full explanation of the facilities available to him whereby he could transfer to Canada the proceeds of his annuities.

Oral Answers to Questions — POTATOES (MINISTER'S SPEECH)

Mr. V. Yates: asked the Prime Minister if the speech made by the Chancellor of the Exchequer on Saturday, 29th November, at Dunsford, Devon, regarding the high price of potatoes, represents the policy of Her Majesty's Government.

The Prime Minister (Mr. Harold Macmillan): My right hon. Friend tells me that he did not say, as reported, that the price of potatoes is higher than it ought to be; but rather that due to the weather it was higher than he would like to see it.

Mr. Yates: Is not the Prime Minister aware that the Chancellor was reported to have said, "Will you ladies stop feeding your families potatoes until I tell you to start again?"? Does this mean that when the prices of essential food are higher than the Government would like them to be, it is now the Government's policy to request British housewives to stop feeding their children with essential food?

The Prime Minister: The hon. Member must not read too much into a lighthearted aside at an informal gathering

Mr. H. Wilson: Is not this simply a case of the gentleman in Whitehall knowing best? Will the right hon. Gentleman say whether it was with his authority that the Scottish Education Department sent out a circular in similar terms asking local authorities, in view of the high cost of potatoes and of meat, to cut down the supply of potatoes and meat to school children?

The Prime Minister: I think that this Question arose from one of those occasions at which my right hon. Friend speaks. It is perfectly clear that what he was deploring was something over which

we have no control—the fact that owing to the bad summer and the bad weather there has been a bad potato crop.

Mr. Wilson: Is the right hon. Gentleman aware that we welcome the recognition by the Conservative Party, eleven years afterwards, that, as in 1947, at the time of the Gravesend by-election, bad weather can affect the supply of potatoes?

The Prime Minister: It certainly can, but it is undoubtedly the fact that the general situation about the cost of living—although there are always one or two items which may upset it—is that it has been remarkably steady for the last twelve months.

Sir A. V. Harvey: Will the Prime Minister assure the House that there is no question of going back to 1947 and telling the people to eat snoek again?

Mr. Yates: On a point of order. The Question which I put to the Prime Minister does not concern these points. It concerns a Minister asking people not to feed their families.

Mr. Speaker: That is not a point for me.

The Prime Minister: I can point out that at any rate the great shortages of those days are over and that freedom has paid hand over fist. Although I find it difficult to follow all the policy statements, I understand that it is not the intention of the Labour Party to try to restore rationing if they win the next election.

Oral Answers to Questions — SUEZ OPERATIONS

Mr. Emrys Hughes: asked the Prime Minister if he will now appoint an official historian of the Suez war.

The Prime Minister: No, Sir.

Mr. Hughes: Is the Prime Minister aware that there is renewed interest in Suez as a result of the mean and cowardly attack by the Foreign Office spokesman on Mr. Randolph Churchill on the ground that his history is inaccurate? Is the Prime Minister aware that there is a general opinion in this country that Mr. Randolph Churchill, along with Lord Hailsham, is one of the most thoughtful members of the Conservative Party, and


does not he think that an objective account of Suez would give the public the information which they are anxious to have?

The Prime Minister: I always do my best to try to anticipate what are likely to be the supplementary questions upon which are based the apparently rather simple Questions that the hon. Gentleman puts down. He asks whether I would appoint an official historian. In the first place, of course, the military operations, strategy and tactics have been dealt with by the dispatches of the officer in command, General Keightley—published, I think, in 1957. In the second place, I would have thought that, with the hon. Gentleman's temperament and general political position, he would always have preferred a freelance to an official approach.

Mr. Strachey: While fully understanding the Prime Minister's reluctance to appoint an official historian, may I ask whether he would agree that all the said historian would be likely to discover would be that the Government adopted in these matters a wrong policy, and mounted a wrong military operation directed on the wrong objectives, which they then failed to take?

The Prime Minister: All this matter was discussed after the publication of General Keightley's dispatches and, I think. remains on the record of the House. Those dispatches are there to be read.

Mr. Wigg: On a point of order, Mr. Speaker. The Prime Minister has twice referred to General Keightley's dispatches, but the House has never had an opportunity, due to the failure of both Front Benches, to debate those dispatches—[Interruption.] That is only a preface to the point of order. In view of the importance of the subject, and the fact that the Prime Minister has already twice referred to them, would you be kind enough, Mr. Speaker, on the Adjournment for the Christmas Recess, to give the House and opportunity to debate these dispatches?

Mr. Speaker: There is no application for that, as far as I know.

Mr. Emrys Hughes: asked the Prime Minister, in view of the damage to this country's military reputation caused by allegations of the unpreparedness of the

Armed Forces made against members of Her Majesty's Government in connection with the Suez War, and of which notice has officially been taken, if he will now propose the appointment of a Select Committee to inquire into the conduct of that war.

The Prime Minister: No, Sir.

Mr. Hughes: While thanking the Prime Minister for that Answer, may I ask if he is aware that there is an impression in the country that he is regarded as one of the very guilty men of the Suez affair—[Interruption.]—and that if such a Select Committee were appointed, it would give him an opportunity of clearing his reputation?

Mr. Wigg: Impossible.

The Prime Minister: Matters were discussed, as I say, after General Keightley's dispatches were published, and, of course, I am sorry if the Opposition Front Bench did not ask for further opportunities for debate.

Mr. Gaitskell: While understanding the Prime Minister's reluctance to have an inquiry into matters in which he was so very closely involved himself, may I ask him how it was that the Foreign Office spokesman said that there were inaccuracies in Mr. Churchill's articles, since most of us regard them as a very clear statement of what we already knew to be the case?

The Prime Minister: I understand that these articles are serialised extracts from a biography of Sir Anthony Eden. The intention of the Government spokesman was not to criticise the author, but to make it plain that, as this was a biography written without consultation with its subject and without access to official records, it could not be expected to give an authentic or fully accurate account. Beyond that, I am not prepared to go.

Mr. Gaitskell: Is not the right hon. Gentleman aware that the Foreign Office spokesman said that there were inaccuracies in Mr. Churchill's statement? I am asking the Prime Minister what those inaccuracies were.

The Prime Minister: I would not be prepared to go beyond what I have just said. [Interruption.] If I were to do


that, I would be making just that detailed comment on the book that the spokesman refused to do.

Dame Florence Horsbrugh: If it is the case, as the Opposition have said they consider it to be, that my right hon. Friend was so closely attached to the scheme of the Suez expedition, does he realise that this is one of the reasons why he is so popular now in the country?

Mr. Bevan: Would not it be a good idea for the Prime Minister to consolidate his popularity by having an inquiry now? Is he aware that there was some reluctance to press for an inquiry at the time because of the illness of one of the principals concerned? As that seems not now to be the case, ought not there to be a very full Select Committee inquiry into one of the most extraordinary incidents of the last 100 years?

The Prime Minister: No, Sir. All these matters were fully discussed at the time in the House of Commons. I recognise that there were divisions of opinion in the House, and outside it, and when the time comes I am willing to put my record, with that of the right hon. Gentleman—[Interruption.]—to the test of the popular vote.

Mr. Gaitskell: Is there any reason whatever why that time should not be now?

The Prime Minister: We fully discussed all these matters—[HON. MEMBERS: "No."] As I say, when the time comes, be it soon—[Interruption.]—or a little more delayed, I am sure that the country will reach its own judgment.

Mr. Bevan: In view of the fact that Foreign Office spokesmen have now seen fit to state that certain published statements are inaccurate, there is now a great deal of confusion in the public mind as to what the real facts are. Therefore, would not it be desirable to clear them up by having this inquiry? Why is the Prime Minister so coy about it? Is he afraid of what might be revealed about himself?

The Prime Minister: No, Sir, and I shall welcome, when the time comes—[Interruption.]—it may be sooner than hon. Members think—the opportunity to put these matters to the inquest of the nation.

Mr. Gower: Is not it a fact that neither an official history nor an inquiry would appear to be needed in relation to one aspect of this matter—the unfortunate behaviour of Her Majesty's Opposition at that time of national difficulty and emergency?

Mr. Shinwell: Leaving aside this proposed inquiry by a Select Committee, does not the Prime Minister feel that, in view of the somewhat serious allegations made by Mr. Randolph Churchill about matters that were not debated in this House at the time of the Suez crisis, nor have been since, it is desirable that the Government should make a considered reply?

The Prime Minister: So far as I have been able to see, all the matters raised in this book, or in these articles, were, in fact, discussed fully in the House.

Mr. Grimond: Can the Prime Minister say in what circumstances he will consider that the time has come to make some further inquiry into these matters, and to publish the findings?

The Prime Minister: The hon. Gentleman always asks a fair question, and I will try to answer it as best I can. I think that it is asked more seriously, perhaps, than have been some other questions. I said that I recognise that there are serious divisions of opinion in the whole matter both inside and outside the House. I do not think that these will be removed by Select Committees or White Papers. They must be left to the judgment of history and of the electorate.

Mr. W. Yates: Is the Prime Minister aware that the majority of people in this country are far more interested in the future policy of Her Majesty's Government towards the Middle East and the Far East as contained in the Gracious Speech? Is this not the aspect about which they are much more interested, rather than what happened at Suez?

The Prime Minister: I agree. There is a very large number of difficult problems confronting us—we debated some of them the other day—in Europe, in the Middle East and in the Far East. I agree that we would do best, perhaps, to concentrate upon those. Nevertheless, I can only repeat that I am slightly surprised that the particular incident of certain publications should have stimulated the


Leader of the Opposition to do what he has not thought fit to do in the last two years.

Mr. Gaitskell: Is the Prime Minister aware that Mr. Randolph Churchill alleges quite specifically that there was collusion between both the French and Israeli Governments and also between the British Government and the French Government, which has hitherto been denied by Sir Anthony Eden? Does not he appreciate that this matter cannot be cleared up except after a full inquiry by a Select Committee? Will he, therefore, please reconsider his decision so that the facts can be laid bare?

The Prime Minister: There was no statement made which was not made at the time and debated at the time and rebutted at the time.

QUESTIONS TO MINISTERS

Miss Burton: On a point of order, Mr. Speaker. May I ask for your help and guidance? My request arises out of Question No. 60 on the Order Paper today. I put this Question down four weeks ago to the Chancellor of the Exchequer and, as he did not wish to answer it, it was transferred to the Minister of

Housing and Local Government, and was bottom but one in the list.
I know that I cannot ask you, Sir, about which Minister shall answer Questions, but the point I wish to put to you in asking for your guidance is this. Does it not seem to you that, when a Question comes from a back bencher relating to Exchequer grants on matters of policy arising out of the Queen's Speech, it should properly be referred to the Chancellor? The second point on which I should like your help is this. As this is an urgent matter, because women are being refused mortgages each week on grounds of sex alone, would you allow the Minister of Housing and Local Government to answer the Question today? It is quite intolerable that such Questions should be delayed for five or six weeks because the Minister does not wish to answer. We have only you to appeal to, Sir, and I should be grateful for your help.

Mr. Speaker: As I have said, I have no authority whatever over the transfer of Questions from one Department to another. The best advice I can give the hon. Lady is to say that she will, no doubt, receive a written reply to her Question and, if it is not satisfactory, she can return to the matter on another occasion.

LOCAL GOVERNMENT, SCOTLAND (GRANTS)

3.33 p.m.

The Secretary of State for Scotland (Mr. John Maclay): I beg to move,
That the General Grant (Scotland) Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved.
The General Grant (Scotland) Order, 1958, and the accompanying Report, are the latest stage in a process which started with the announcement which was made in Parliament, on 12th February, 1957, indicating the outcome of our review of local government finance. This statement was later embodied in the White Paper, Cmnd. 208, published in July, 1957. The proposals in the White Paper were given effect in the Local Government Act, passed in the summer of this year, and the Act, in turn, required the Secretary of State to make the General Grant Order and lay it, along with a Report, before the House.
The Order itself is a straightforward document. It sets out the result of our calculations arrived at in consultation with the local authority associations. The Report explains how we have done the sums. Before developing this in more detail, I think it is worth while attempting to set the Order and the Report in their proper perspective.
In the original statement, Ministers said that the Government had three proposals: to enable local authorities to raise more of their revenue from their own resources by rerating industry to 50 per cent.; to review the relationship between the central Departments and the local authorities; and to reform the system of Exchequer grants by introducing the general grant.
As the House is aware, the 1958 Act rerated industry; and allowance is made for this in the General Grant Order. The Act also contained relaxations of the controls to which local authorities had previously been subject, and further relaxations are included in the Town and Country Planning Bill now before the House, which removes most of the restrictions on local authorities' land transactions. With the laying of the General Grant Order, we can fairly claim that we are fulfilling our promise to give local

authorities increased financial independence and more freedom to manage their own affairs.
To come now to the Order itself, Section 2 (1) of the 1958 Act sets out in explicit terms the various factors which the Secretary of State has to take into account when fixing the totals of the general grant. These factors are also reproduced in paragraph 3 of the Report. I should like to explain now the procedure which has been followed and how this procedure fully complied with the statutory requirements.
A few months ago, we asked local authorities to let us have figures showing the latest available information about the current rate of expenditure on the relevant services, together with estimates of that expenditure for the two years covered by the Order. These figures were scrutinised by my Departments, and some adjustments were made in the estimates for the years 1959–60 and 1960–61. These adjustments took account of future variations in the level of prices, costs and remuneration, so far as my departments can forsee them, of any probable fluctuation in the demand for the services, and of the need for developing these services, having regard to the extent to which the country can afford such development. In other words, the exact procedure laid down in Section 2 of the Act has been carried out.
The results of our calculations were circulated to the local authority associations, whom we are required to consult under Section 1 (5) of the Act. My hon. Friend the Joint Parliamentary Secretary of State met the associations' representatives on 14th November and discussed the calculations with them in considerable detail. I should emphasise that the differences between the local authorities' own estimates of relevant expenditure and the figures proposed by the Departments were very slight and were, in fact, marginal when compared with the total figure. We made clear in detail what adjustments we had suggested and the reasons for them, and these suggestions and any other points raised by the local authorities were the subject of detailed discussion round the table item by item.
In the outcome, as explained in paragraph 5 of the report, certain of the figures were modified to take account of


the further points made by the associations. The final result is set out in the table in paragraph 5. These figures, I should inform the House, are accepted by the local authority associations as the best estimates which can be made at present of their likely relevant expenditure in the two years in question.
Perhaps I should say, at this stage, that I know that the local authority associations were originally of the view that they had not been given enough time to consider the Government's proposals, and they thought that further meetings would have been desirable. It is, of course, true that we never have as much time as we want to do complicated sums of this kind. But the House will want to know that, at the end of our meeting with the local authority associations, there was only one figure in dispute, and this has since been appreciably modified to take account of their views.
I can give the details of that figure if hon. Gentlemen want it. The figure in question related to the amount included in relevant expenditure for loan charges on educational building. If I may amplify it, since it was the only one in dispute, the local authorities' estimates had not been accepted by the Department at the outset. Further discussion, however, did reveal that the authorities' estimates for 1959–60 were based on firm commitments for loans in respect of work which had already been started, and the local authorities' estimates were, therefore, accepted. For 1960–61 a revised figure was proposed by the Department after detailed discussion which has since been accepted by the local authority associations. I hope that that gives the information.
I must make clear once again that the general grant is not merely the sum of the estimated specific grants that it replaces. If it were there would be no purpose in introducing the general grant. Since this is the first general grant, however, we thought it only right to take full account of the detailed expenditure which local authorities expected to incur on the relevant services. This was our starting point. We then had to decide what assistance we should give towards the cost of these services. This obviously must be a matter of judgment, and in our view the right course was to accept the local

authorities' estimates, adjusted and agreed after discussion, and to provide Government assistance towards this expenditure on broadly the same scale as obtains at present. The adjusted estimates make a fair provision for such future increases in costs as can be foreseen at present, and also make allowance for reasonable, foreseeable development.
It will be observed, for example, that the total estimated relevant expenditure for 1959–60, which is over £80 million compares with an actual net expenditure of just over £69 million in 1957–58 and estimated expenditure of £75 million in 1958–59.
Adjustments have also been made on this occasion to take account of certain other effects of the 1958 Act, namely, the discontinuance of certain minor grants, the effect of the additional income which local authorities will receive from rerating and the effect on the Exchequer equalisation grant. These are described in paragraphs 9 to 11 of the Report and their net effect is to increase the general grant for the first year by £465,000. The final figure is, therefore, £50·125 million for 1959–60 and £52·075 million for 1960–61.
From 16th May, 1959, the local authorities themselves will decide how to spend this money. The Government have every confidence that they will use wisely the grant they will receive when the total figure is apportioned by means of the formula set out in the Second Schedule to the Act. The actual amount which each individual authority will receive will be notified as early as possible in the New Year. I need not remind the House, however, that under the transitional arrangements provided for under Section 18 of the Act, no authority will lose anything in the first year of the grant's operation, and only 10 per cent. of any loss in the second year. The gains and losses will be calculated in accordance with the General Grant (Transitional Adjustments) Regulations, which have also been laid before the House. There will, however, be a net gain of approximately £750,000 to Scottish local authorities as a whole from the first year onwards.
While it will be for the local authorities to decide how to spend the grant, the House will expect to have some indication of the kind of development which we hope to see during the next two years


and of the provision which we have made for it in our calculations. Taking the main services covered by the grant in order, the details are as follows.
In education, the main developments in the period will be the provision of new schools; an increase in the number of teachers; the development of secondary education; improved facilities for higher education; further provision for full-time and day-release courses in further education; and for the development of the youth service.
Educational building will be maintained at a high-level and the value of work to be started during the first general grant period, 1959–61, is expected to be about £30 million. On the basis of the forecasts of the Committee on the Supply of Teachers, modified by later information, we expect that the number of certificated teachers will increase by more than 1,000 during the period. Allowance has been made in the authorities' estimates for the salaries of these additional teachers and for the recent increase in teachers' salaries.
Provision has also been made for the increase in the number of pupils in the secondary schools in consequence of the effect of the "bulge" on the secondary school population and of the increasing number of pupils expected to remain at school after the age of 15. The main task in this direction during the period will be to maintain and improve standards for these pupils.
The need for increasing the facilities to enable students to receive education at the higher levels in the training colleges and central institutions has also been allowed for. I am giving a lot of details because it may be helpful to the House to know how the figures have been arrived at. The new Bursaries Regulations made in 1957 and 1958 will enable more students to receive bursary assistance; they prescribe higher rates of allowances and lower parental income scales. Allowance has been made for this.
The education authorities also expect that the number of students attending full-time and day-release courses at further education centres will rise during the period as a result of the general encouragement being given to these forms

of education; and account has been taken of this in their estimates. Their estimates also make provision for an increase in contributions to the Youth Service and other bodies in respect of prospective developments in this field.
I turn now to health—

Miss Margaret Herbison: Before the right hon. Gentleman leaves the question of education, I should like to ask whether he can tell us by how much the Department cut the estimates which local authorities gave for building and capital investment during 1960–61. He has told us that where there was a difference the Government allowed the estimates for 1959–60 to stand, but not the estimates for 1960–61.

Mr. Maclay: The hon. Lady will realise how the problem arose. I will not attempt to give a categorical answer now, but I do not think that there was a cut. I should, however, like to check that, and no doubt my hon. Friend the Joint Under-Secretary will deal with the point when he winds up the debate.

Mr. J. Grimond: The Order says that the amount to be received by each authority will be notified as soon as possible. Is there to be further discussion with local authorities about the amount, or has discussion finished? Also, will there be an opportunity in the House to discuss the amounts?

Mr. Maclay: The position is that there will be no further discussion because the method of distribution is laid down by the formula which appears in the Act.

Mr. Grimond: It cannot be altered?

Mr. Maclay: No, it cannot be altered. That is laid down and has been decided by the House. The formula will be applied to the sum and local authorities will be notified as soon as practicable. There are reasons, into which I do not propose to go at this stage unless hon. Members wish it, why it is not possible to give at this moment the precise distribution, but there is a great difference in the English position. The formula is not in the English Act, and one point of difficulty which we are up against is that we have to find out the standard rateable value before we can get the final result. If the hon. Gentleman wants me to go


into that point in great detail, I can, but I think it would be better to leave it to my hon. Friend the Joint Under-Secretary of State. I can assure the hon. Gentleman that there are very convincing reasons why it would not be practicable or wise to give the final distribution figure in advance.
Allowance has been made for increased expenditure on occupational and day care centres for the mentally handicapped, for the provision of additional psychiatric social workers. and for the boarding out of increased numbers of mental defectives, equivalent to expansion at about one and a half times the rate in previous years.
The Domestic Health Service is playing an important part in the care of the aged and in reducing the demand for hospital beds and for accommodation in local authority welfare homes. There has already been considerable expansion in this service, the number of helper hours during 1958–59 being just about half as much again as the number of hours in 1953–54 and an allowance has been made for continued growth of this service.
Account has also been taken of the need for new clinics and day nurseries, for increases in nursing staffs, and for increased dental services for mothers and young children, for increased chiropody services for old people and for the expansion of the anti-poliomyelitis programme announced in the House of Commons on 21st July, 1958. I hope that the House is not bored by these data. It is important for a full understanding of what we have done in arriving at the final figure.
Allowance has been made for some increase in establishment of firemen to take account of likely developments in the service. The proposals by fire authorities for obtaining appliances and other equipment and for continuing their programme for the replacement of out of date hydrants have, in general, been accepted.
Provision has been made for an agreed increase in the number of children in care as foreseen by the local authorities, and allowance has been made for the further development of the boarding out of children received into care. Allowance has also been made for improvements in existing children's homes and for replacement of some large and less suitable homes by some small family-group homes.
I come next to town and country planning. Grants are at present paid under the Town and Country Planning (Scotland) Acts, towards the cost of the acquisition, clearing and preliminary development of land in readiness for other forms of development such as industry, shops and houses. The local planning authorities have estimated that in 1958–59 they will acquire for planning purposes about 60 per cent. more land than they did during the previous year. Allowance has been made for the continuance of this increase in planning work, at an equally high rate during the two years covered by the first Grant Order.
Next, road safety. The estimates of expenditure on road safety and training submitted by road safety committees have been increased to make provision for the Child Cyclists' Training Scheme, which we hope will receive general support. All these details show the great care with which future possibilities have been examined by the Department in conjunction with the local authorities. They represent the fulfilment of everything that we have said in the debates at the various stages leading up to the General Grant Order.
The welfare services for the handicapped are an extremely important item. The Report of the Piercy Committee, Cmd. 9983, indicated that, with the exception of the services for the blind, there was room for considerable expansion in the services provided for handicapped persons. These services are not at present grant-aided, but an allowance has been made in the general grant towards the cost of their development.

Mr. Thomas Fraser: The Secretary of State has mentioned a whole list of services and in each case has ended by saying that an allowance has been made for it in the general grant. Would it not have been helpful if he had told us how much the allowance was in each case?

Mr. Maclay: The precise details are extremely complicated and entail a mass of figures. I am informed that in every case the figures were fully agreed with the local authority associations as being appropriate and relevant. To go into the precise details of all these figures would be going a good deal beyond what is normal in this kind of debate.

Mr. William Hamilton: Would we not be able to get them by Question and Answer in the House on Tuesday?

Mr. Maclay: That is a question of which I should like notice, but I will try.
The welfare services for the handicapped are not at present grant-aided, but an allowance has been made in the general grant towards the cost of their development. The allowance provides for the expenditure to increase by 15 per cent. in each of the two years of the first grant period.
The last category to be described is the residential and temporary accommodation under the National Assistance Act, 1948. Grants are at present paid under that Act towards the cost of accommodation of the elderly and the infirm. Allowance has been made in the General Grant Order for the provision of about 250 additional places during each of the two years of the first grant period. This represents an increase of 50 per cent. above the progress likely to be achieved during the current year 1958–59.
I have given these figures in some detail and I hope that they have been of interest to the House. It will be evident from them that we have budgeted for a steady programme of expansion and the amount of the general grant shows that we have provided for a balanced and orderly development of local authority services. After these years of discussion about this new system of general grant, I feel that what I have just said shows very clearly that we have meant every word we have said throughout all the debates, in spite of the doubts which have been cast in certain quarters, sometimes from the Opposition.
In spite of the genuine anxiety felt by people outside the House that the general grant system represented something new and dangerous, I am convinced that as time goes on, when these people realise fully what we have done for this first general grant period and the new life that this will undoubtedly give to local authority discussions and the new interest in local authority work, they will appreciate that we have built and founded well. I commend the Order to the House.

3.55 p.m.

Mr. James McInnes: I am glad that the Secretary of State took the opportunity of indicating at the outset of his speech the protestations of the local authority associations at not being given adequate time to consider all that was involved in the fixing of the aggregate grants. I am, however, exceedingly sorry that the right hon. Gentleman did not include in his Report all the information which he has imparted to us today. I am also sorry that he did not come to the House prepared to give the figures concerning each of the services that he has specifically mentioned.
As the right hon. Gentleman said, Section 1 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, requires the Secretary of State, with the consent of the Treasury, to make general grant Orders fixing the aggregate amount of the general grant payable, to make such Orders after consultation with the local authority associations and to lay the Orders before the House with a report explaining the considerations leading to their provision. I propose to confine my remarks largely to dealing with the failure of the Secretary of State to explain in his Report all the considerations that led him in fixing the aggregate amount of the general grant.
The right hon. Gentleman's Report is a concise document. So concise is it, in fact, that it fails lamentably to explain the considerations that the right hon. Gentleman took into account when fixing the amount of these grants. Indeed, it is so concise that the Secretary of State has been able to condense into three pages of print all the factors which he took into account in fixing these grants, whereas his right hon. Friend the Minister of Housing and Local Government took 21 pages and an Appendix to explain precisely the same thing. Does the Secretary of State seriously regard this contemptible little document as a Report which in any way fulfils the requirements laid down in Section 1 of the 1958 Act?

Mr. Maclay: The hon. Member has always made the case for what he calls this "contemptible" document. Has he read right through the English Report? It deals with matters additional to those with which I am dealing in my Report. Furthermore, if we feel that we can give


the facts with reasonable brevity, there is no particular merit in using a large number of words. That, however, is no reflection on the English White Paper.
Some of the details that I have filled in today are details of factors—they are not necessarily factors themselves—and it seemed to me that the most courteous thing to the House was to give in my Report the basic factors as laid down in the Act and to amplify them in my speech explaining them to the House.

Mr. McInnes: I cannot follow the right hon. Gentleman's remarks. This afternoon he utilized all his time to explain to us the relevant factors that enabled him to fix the aggregate amount of grants, whereas the Minister of Housing and Local Government explained in his Report the reasons, the factors and considerations which enable him to fix the grants for England and Wales.

Mr. Maclay: If I follow the English model I am accused of slavish imitation. If I do what I consider better, I am reproved. I stand unrepentant. I think that this is the best and most courteous way of dealing with the matter.

Mr. McInnes: It is because of the circumstances in which we find ourselves today that the Glasgow Herald, for example, thought it necessary to make this comment on the right hon. Gentleman's White Paper:
Of the two White Papers issued, that from the Ministry of Housing and Local Government is the more explicit.
Why has there been this failure to include all the information? Why has there been this timidity on the right hon. Gentleman's part in providing all the data that he has used as a basis for determining the aggregate of the grants?
Was it because in the White Paper to which he referred, Cmd. 208, which he issued in July, 1957, and which outlined the Government's reasons for introducing a system of general grants he gave away too much information? That was the occasion when the right hon. Gentleman expressed a view entirely different from that of the Minister of Housing and Local Government about the real reason for introducing the system of general grants.
I quote from paragraph 17 of Cmd. 208, which is headed "Reduction in

Grants". There is nothing ambiguous about the heading at least. The paragraph says:
The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants. The reasons for this proposal … are briefly that local authorities now receive more from Government grants than from rates—an undesirable development if local government is to retain its financial independence …

Mr. Maclay: We must get this straight. I have some sympathy with the hon. Member in making his speech, because I know that he is finding it much more difficult than he expected to attack the grant. The quotation which he makes takes no account of the fact, which he would have discovered if he had read on, that the whole intent of the words was that we were to have an increase of local income through rerating. It was simply a question of getting a better balance. Every hon. Member has said, at some time or another, that it is very desirable that local government should not be so dependent upon the central Government for its finances. Everybody realises that.

Mr. McInnes: I should appreciate it if the right hon. Gentleman appreciated his own difficulties rather than mine. The right hon. Gentleman is bobbing up and down there like a yo-yo in trying to justify his own decision. There is absolutely no misunderstanding on my part.
This paragraph is quite clear. There is no ambiguity about it. It is a reduction in grants. I suspect that, because of his honesty, the right hon. Gentleman was rapped over the knuckles for explaining the reason why it was necessary to introduce the block grant system, but having been rapped over the knuckles is no justification for pretending this afternoon to be uninformed. I should have preferred it if the right hon. Gentleman had been honest.
In any case, the right hon. Gentleman is in duty bound, under the Act, to submit a report explaining the considerations which led him to provide for the amount of grants shown in the report. I submit that we have not had this explanation. Indeed, the absence of explanation compelled me on 2nd December to put Questions to the right hon. Gentleman. The Answers which he gave revealed that grants payable to Scottish local authorities in respect of relevant expenditure


for general grant purposes had in 1956–57 exceeded the 1955–56 total by £4½ million.
The 1957–58 figures were £4½ million more than the 1956–57 figures, and the figures for 1958–59 were £4½ million more than those of 1957–58. But I find from the Secretary of State's Report that instead of this annual average increase of £4½ million, in 1959–60 there is an increase in grant of only £2¾ million, and in 1960–61 the figure is only £2 million more than that for 1959–60 Quite obviously, therefore, we in Scotland have failed to sustain what in the past has been an average increase of approximately £4½ million each year.
I regard this as an extremely serious matter. This is one of the reasons why the right hon. Gentleman has not disclosed the facts in his Report. I often wonder why we in Scotland are compelled on so many occasions to elicit by way of Question and Answer in the House information which ought to be contained in documents. One needs only to look at the Ministry of Housing and Local Government Report to have revealed an excellent table showing the comparative figures of grants for the past seven years and for the two years that lie ahead. Obviously, the Minister of Housing and Local Government has provided the maximum amount of information to hon. Members who represent English and Welsh constituencies.
It seems to me that the Secretary of State took a degree of comfort this afternoon from the very qualified approval which he obtained from the local authority associations in respect of his general grant proposals. This, of course, has resulted in a good deal of window-dressing. The Government proclaim that these proposals and these grants are the highest ever but, on the other hand, I could claim with equal emphasis that local government expenditure has also reached the highest total ever.
The acid test is: what percentage the proposed grants represent of the total estimated expenditure of local authorities? We do not know, nor does the Secretary of State. I am willing to give way if the right hon. Gentleman will tell the House exactly what percentage the grants for 1959, 1960 and 1961 represent of the total estimated expenditure of local authorities.

Mr. James Stuart: May I ask the hon. Gentleman whether he is insinuating that the degree of efficiency of a local authority is to be judged by its extravagance, by the amount of money it is capable of spending?

Mr. McInnes: I do not know that I made any such imputation. It is typical of the right hon. Gentleman the Member for Moray and Nairn (Mr. J. Stuart) to put up his own dollies and start knocking them down again.

Mr. Stuart: All the hon. Gentleman is asking is how much a local authority spends, not whether it is spending efficiently.

Mr. McInnes: I would counsel the right hon. Gentleman to keep quiet in case he lets the cat out of the bag. The difficulty is that he obviously is not following my remarks—

Mr. Stuart: I am.

Mr. McInnes: I am putting to the Secretary of State what I regard as the acid test of the correct amount of grants.

Mr. Maclay: I have the figures on the comparative basis for which the hon. Member asks giving the grant as a percentage of relevant expenditure. In 1957–58, the percentage was 61·4; in 1958–59, it is estimated to be 61·7; in 1959–60, it is estimated to be 61·9 per cent.; in 1960–61, it is estimated to be 62 per cent. A rise in grant is a percentage of relevant expenditure.

Mr. McInnes: It is for us to analyse the figures which the right hon. Gentleman has given us. I do not know why he did not incorporate them in his Report, as did the Minister of Housing and Local Government.

Mr. Stuart: If I may make one last interruption, would the hon. Gentleman have been satisfied with 21 pages of verbiage, because that would have relieved us of this criticism?

Mr. McInnes: I would never under any circumstances have been satisfied with 21 pages of verbiage from the right hon. Gentleman the Member for Moray and Nairn. He must recognise that the ever-increasing rate burden in Scotland, and the figures I will give now will, to a degree, answer his intervention.
In 1945, the total rates collected in Scotland amounted to £25 million. In 1951, six years later, these had increased to £32 million, which was an increase of £7 million in six years. Between 1951 and 1957 the total rates collected increased from £32 million to £63 million, an increase in six years of £31 million. When we consider Government grants in relation to the total relevant expenditure of local authorities we must also have to consider the ever-increasing rate burden that is being imposed on the ratepayers in Scotland.
There are many other points to which I should have liked to refer, but I will only ask the right hon. Gentleman the following question. When he discussed these grants with the local authorities, were the estimates submitted put forward in the climate of the restrictions and curtailments announced to the local authorities on 17th February, 1956? Or were they submitted in the climate of expansion which the Government have so recently announced in this House? That is one thing we ought to know.
In his speech the right hon. Gentleman dealt with some of the services and gave us an approximate indication of those that have been taken into consideration and those that have not. I want to deal with the question of the provisions mentioned in his White Paper. He mentions expenditure on the welfare services for the disabled, the Town and Country Planning Bill, now before Parliament, expenditure on accommodation under the National Assistance Acts, and also states that the estimates will have regard to variations in the level of prices, costs and remuneration. He also refers to the adjustment in respect of the contribution made by Scottish education authorities to the Scottish universities, which I think is about £60,000.
There are other factors about which the right hon. Gentleman made no observations. For example, there is mental health. Having regard to the recommendations in the Report of the Royal Commission on Mental Illness and Mental Deficiency, the acceptance of that Report by the Government, and the recognition that it will place far greater responsibility an local authorities, will the Joint Under-Secretary of State tell us what provision has been made in respect of that service? I observe from the OFFICIAL REPORT of

yesterday's debate that the Minister of Housing and Local Government stated that his estimates as a whole allowed for an annual rate of development in this respect, in each of the years 1959–60 and 1960–61, at roughly two-and-a-half times the rate which has obtained in recent years.
Another service of particular social significance is that of domestic help. Did the Secretary of State make any provision for that service in his discussions with the local authorities or in the adjustments he made of their estimates? Does he visualise any appreciable increase in this service? Has the right hon. Gentleman made any provision for improved or additional welfare centres for mothers and young children? I also think that he mentioned in his speech provision in respect of midwives, health visitors and home nurses, but he did not say whether or not provision had been made for the expanded anti-poliomyelitis vaccination programme which was mentioned in the House.
The right hon. Gentleman also mentioned that provision had been made for an increase in manpower in the fire service and for the progress that will be made in that service during the next year or two. I cannot recollect whether he referred to the development of school crossing patrols, police traffic patrols, and road safety, but if no provision has been made in respect of those services, perhaps the Joint Under-Secretary will tell us what the position is.
Finally, did the right hon. Gentleman disclose all those relevant factors during his discussions with the local authority associations? For example, I direct his attention to paragraph 6 of his own Report, where he says:
These totals … take account of such future variations in the level of prices, costs and remuneration as can be foreseen, and also any probable fluctuation in the demand for the relevant services.
In paragraph 9 of his Report, the Minister of Housing and Local Government says:
Nothing is included for possible further increases in the price level of goods and services. Whether or not stability is wholly achieved during the period of grant, it is natural that public authorities will seek, as they normally do, to meet increases by economies and they will constantly improve efficiency by the use of new techniques.


Can the right hon. Gentleman explain the different approach in the two countries? Since the legislation for Scotland and for England and Wales is precisely the same, I find it difficult to appreciate why we have different lines of approach towards these matters of price levels for goods and services. I hope that when he replies the Joint Under-Secretary will take the opportunity of answering the questions I have put.
I conclude by saying that while I recognise that the general grants were, admittedly, based on estimates submitted by the local authorities themselves, subject, of course, to adjustments by the Scottish Departments, I beg hon. Members opposite to realise that the highly desirable development and expansion of local government services rest not with the local authorities, but with the Government. In that knowledge I genuinely believe that when the implications of the general grants are fully appreciated by individual authorities, then and only then will they recognise the great betrayal.

4.23 p.m.

Mr. W. S. Duthie: I must admit that I am still gravely concerned about the Order. It puts into effect the provisions of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, which caused many of us much heart-burning in the earlier part of the year. The round figures put forward by my right hon. Friend appear to be fair enough, but the uncertainty and grave disquiet are caused by the difficulty of knowing exactly how individual areas will fare in the distribution.
Yesterday, when the Order for England and Wales came before the House, Members from English and Welsh constituencies were furnished with a complete apportionment of the grants for their areas. The list was complete, exhaustive and comprehensive. There is no such list for Scotland. I am amazed that we should be asked to legislate without being aware of the local implications of the Order.
As my right hon. Friend knows, I voiced my grave concern for my constituency at various stages of the Act and voted against its Third Reading because of the inequitable treatment which my county was arbitrarily receiving in the apportionment of the money. I was told

that this was because of the application of a formula. That is still a complete enigma to me. I have never had the formula explained, nor whence its source, nor how it was applied, nor the reason for it, nor its logic.
Scottish Members are now being asked to buy a pig in a poke. That is how the matter appears to me. It may be argued that if we do not pass the Order now we shall halt the machinery of distribution. That may be, but I must register my strong protest that the Government should come to the House with an Order of this importance without bringing forward, also, the precise information which is vital to making a correct decision.
I am merely applying normal business principles. There is no board of directors worthy of the name which would engage upon a decision of this nature without having the fullest information. During the early stages of the Bill, which is now an Act, I criticised the somewhat grandiose and over-confident expectation about local taxation. The prognostications about local industry which we then made have been realised all too unfortunately. There has been a falling off of orders in the shipyards and there is every likelihood that their contribution will be even less than we surmised.
I do not want to hold up financial provision for Scottish local authorities, but I protest at having to come to the House to consider this Order without knowing exactly how my constituents will fare, and on behalf of my constituency I register that protest most emphatically.

4.28 p.m.

Mr. J. Grimond: I shall be extremely brief. I am very happy to follow the hon. Member for Banff (Mr. Duthie), because, like him, I represent a county which will fare badly under the new formula. As I said in previous debates, it may be that for certain counties in Scotland a case can be made for reducing grants. I do not know, but it is possible that that might be so. What I have to complain about is that no one has argued that Banff, Shetland, or any other county which will lose under the new arrangements, deserves to have its grants reduced. It is agreed that it has happened by ill-luck, but ill-luck is not a good basis for Government legislation.
I understand that on this Order we cannot again consider the whole principle of the new arrangements for the general grant. I shall, therefore, confine myself to joining with the hon. Member for Banff in protesting about the reduction of grant to counties which are to be badly hit. I share the misgiving expressed from the Opposition Front Bench about what will happen if prices rise. I understand from the Secretary of State that we are to have no chance to alter these figures. They are to last for two years, within which time there may be a substantial movement in prices.
I very much regret that, unlike the English Members, we shall not have an opportunity of judging how our particular counties and local authorities will fare. Even if we cannot alter the figures we should at least like to feel that we are in a position to comment upon them, criticise them and have them explained by the Government. That is the least the House of Commons should expect to be able to do to fulfil its duty.
Over the next two years we hope for some developments in certain areas in Scotland, including the North, which will throw an additional burden upon local authorities. We hope that some assistance will be given to encourage new industries to come in. and we hope for some assistance in the extension of certain services, including education, at any rate in my county. Some allowance is made for education on page 3 of the Order, but it is not a very large amount, especially if there is an increase in prices, and other factors do not seem to have been allowed for at all.
I end by reiterating what I have said before namely, that it is not possible to have a much larger burden placed upon the rates in the North. I am opposed to the whole rating system, which has become anomalous, and is a very bad system. I realise that that is a different point but, good, bad or indifferent, we cannot go on piling burdens on the rates, and if the Government are to go forward and tell local authorities that they are being offered a wonderful vista of the time when they can run their own affairs, they must provide local authorities with new means of finance.
I maintain my original objections to the whole principle and I wish that we

had been given, or could be given in the future, more details of the way in which individual authorities will be affected by these proposals, because we are bound to be concerned with individual cases.

4.32 p.m.

Mr. E. G. Willis: I hope that the Secretary of State will now pay more serious attention to the complaint made by my hon. Friend the Member for Glasgow, Central (Mr. McInnes) about the lack of information, because that complaint has been reinforced by one of his hon. Friends and also by the Liberal Party, so that representations in this respect are unanimous. so far.
My hon. Friend was being generous when he said that three pages of the White Paper explained how the Secretary of State had arrived at the figures. In fact, the White Paper gives us about two paragraphs. It is all contained on page 3, in the notes under the table and in paragraph 6. All that the right hon. Gentleman says in the White Paper is:
These totals … take account of such future variations in the level of prices, costs and remuneration as can be foreseen, and also of any probable fluctuation in the demand for the relevant services. They also appear, having regard to the fact that the revised estimates of relevant expenditure for 1959–60 and 1960–61 are larger than the actual net expenditure … incurred in 1957–58, to make reasonable provision for the need of developing these services and for the extent that, having regard to economic conditions, it is reasonable to develop them.
All that he has done is to take the words from the Act and say, "This is what we have done. This is the answer" These are the exact words of the Act. That is not good enough. It is not the way in which Scottish Members should be treated when asked to consider the expenditure of about £50 million of public money. The Joint Under-Secretary should give us a better answer than we have had from the Secretary of State.
It is difficult for hon. Members who have been given a mere paragraph of information, such as I have read, and have then listened to a speech from the Secretary of State, to follow exactly what sort of considerations have led to these conclusions. All the information given us by the right hon. Gentleman could have been put into the White Paper. He had all that information when the White


Paper was published. It would not have been irrelevant; it would have helped us to understand what had been done, and would have enabled us to discuss this grant more intelligently than we can at present.
The right hon. Gentleman seemed to derive great comfort from the fact that the percentage of local government expenditure to be met by the general grant is being increased. The present policy of the Government is to try to encourage public bodies to undertake public expenditure so as to do something about unemployment. In those circumstances, one would expect this expenditure to be increased. The great question which arises is: what happens when the Government decide to decrease expenditure, as they have been doing in the past two or three years? That is when the real test of this system will emerge. Local authorities will not be able to cut down their expenditure so readily as the Government will expect of them.
My hon. Friend the Member for Glasgow, Central asked about the level of prices, costs and remuneration. We have been told nothing about that, and the White Paper says nothing about it. What did the Government have in mind when they made allowances for those things? We do not know, and we should be told whether the Government expect any increase.
The Secretary of State told us that the value of the work to be begun in the next year or two in respect of education was £30 million. It would be much more relevant if we were told the amount to be spent in each of these years. What do the Government expect to spend in those years, over and above what is at present being spent on school buildings? Last week, a White Paper was issued dealing with this question, and the figure for Scotland was put at about £60 million. How much of that is to be spent next year, or the year after? If we know that, we shall be able to see whether the general grant makes sense, but we cannot intelligently discuss the question whether it should be increased unless we know to what extent the Government expect to embark upon this programme, and how much they intend to spend in the next two years.
Is the programme to extend over twenty, ten or five years? The right hon.

Gentleman told us that he expects to start £30 million worth of work on new school buildings during this period, but the important question is: how much does the right hon. Gentleman expect to be spent in that period? We can judge this only in terms of the amounts that local authorities will spend, and we should be given some information about them. There are many other items about which we should have more information if we are expected to arrive at a decision with any feeling of knowing what the facts are.
One of the few things that is explained in the White Paper is the figure for town and country planning. The Town and Country Planning Bill, now before Parliament, proposes to amend the basis for compulsory acquisition of land. It is not expected that the annual increased relevant expenditure incurred by local authorities, if the Bill is enacted, will be a figure of any magnitude.
The amount has been estimated at £20,000 next year. When we were discussing the Bill on Second Reading we were told that the local government expenditure involved in this was £1¼ million and that the largest part of the expenditure was for housing, which is, of course, not part of the relevant expenditure, and that that large part accounted for £500,000. We were told also that the total increased expenditure was about 25 per cent., which was £300,000. On housing, for instance, we were told that, taking an average of 25 per cent., increased expenditure expected under that heading would account for an increase of £125,000.
What about all the other expenditure with which local authorities will now be concerned? If the figures given by the right hon. Gentleman during the Second Reading debate were correct, I would have thought that the figure, instead of being £20,000, would be £150,000 to £175,000. That is my calculation. Whether it is correct, or £50,000 out, there is still a very big difference between £20,000 and £175,000.
What are we to assume from this? Are we to assume that when the right hon. Gentleman gave the figures previously he was not giving us figures based upon any knowledge of the facts? Now that he has discovered the facts, he finds that the


amounts are £20,000 in 1950–60 and £40,000 in 1960–61. That seems to me to be the reason why that particular figure was given. But I do not want to say anything more about this matter, because my hon. Friend the Member for Glasgow, Central has dealt with it very fully.
I want, in conclusion, to emphasise the need for the Secretary of State to treat the House much more courteously than he has done over this White Paper. I do not know what he has been accustomed to, but he ought by this time to know that we like to know the reasons why certain conclusions or recommendations are placed before hon. Members for approval. It is not good enough to serve us up with something of this kind. I am quite prepared to accept that there may be certain technical difficulties in connection with the publication of actual figures for local authorities, but in giving the reasons why the general grant is on a certain level there is no reason at all why we should not be treated better than this. I hope that the next time that a general grant Order comes before the House we shall be given something which explains the reason which has led the Government to put forward their proposals.

4.45 p.m.

Mr. William Hamilton: We have now had four speeches on this Order, apart from that of the Secretary of State, and not one of them has supported the principles upon which it is based or the manner in which it was presented. It is too bad that the Secretary of State should come here to present a complicated Order and talk for just a quarter of an hour on it. He had all the time in the world. There was, quite clearly, no great desire on the part of hon. Members on his side of the House to speak on it. He could have taken one-and-a-half hours or even two hours. We would have endured it. At any rate, we should then have had some facts on which to base our arguments.
The right hon. Gentleman's statement reminded me of the kind of statistics which we get from the Soviet Union—designed to conceal more than they publicise. We had, of course, the usual bromides, which we have been sick and tired of hearing in the course of the legislation concerned with this Order—more freedom for local authorities; the ability to raise more money for themselves in

the form of rerating. It is rather curious that the right hon. Gentleman used the argument—more freedom for local authorities—while, at the same time, pointing out that the percentage of grant on relevant expenditure would steadily increase over the next few years.
If the argument is to be sustained that local authorities are to get increased freedom from rerating, why not—and we repeat the argument which we used in Committee—go the whole hog and rerate completely? The Institute of Public Administration, two years ago, recommended precisely that and, moreover, recommended the complete rerating of agriculture. If we want to give freedom to local authorities we can very soon give them freedom to raise more money than they have at present by measures of that kind.
The right hon. Gentleman also said, in a carefully considered peroration, that we were budgeting for a steady programme of expansion. It is rather strange, in view of the context when the idea was originally introduced, that the Minister of Housing and Local Government, the Chancellor of the Exchequer, and Treasury Ministers at Tory conferences and in this House gave as the reason for introducing this that it was one of the measures of economy which the Government were then introducing.
Of course, the difficulty that the Government are now in is that the context has completely changed. The Government are now afraid of a slump of their own creation and, in fact, are going out of their way to tell local authorities in England and Scotland to spend as much as they can on any kind of service they can to stop unemployment. Precisely because the context has changed the Government are now trying by this block grant system to get local authorities to spend more. The difficulty of course, as the hon. Member for Orkney and Shetland (Mr. Grimond) said, is that they will do that only by increasing their rates. The rate burden now is an intolerable one for many local authorities.
The Secretary of State made great play with the educational advance that this Order will allow. I am not sure that local authorities will be convinced by that, or that we shall get the kind of expansion that we want, that the country demands, and that the Government White Papers have laid down as essential.
In all the fine talk about expenditure on education which we have heard today from the Secretary of State, and in the contents of the recently issued White Paper, there is no mention whatever of the fundamental question, which does not relate to buildings at all but to the quality of the teachers. A good teacher teaching in a barn is better than an inferior teacher teaching in a first-class building. To get good teachers we must pay them adequately, but there is no mention in the White Paper, or in the references to the general grant, of any provision for a substantial increase in teachers salaries.
It is that in which teachers are interested. They are not so much interested in the buildings, but in what they will get. To me, that is a reasonable attitude. The record of the Secretary of State in this respect is regarded with suspicion. The recent 5 per cent. increase in teachers salary was delayed by the right hon. Gentleman as long as possible, so the teachers are suspicious about his attitude towards them.
The Secretary of State said that there would be some expansion in the Youth Employment Service. He did not give us any figures or tell us what that expansion would be. It is certain that the service has long been recognised as the Cinderella of the social services. Recently the Select Committee on Estimates made some scathing comments on the attitude of Ministers towards the service. The problem of juvenile unemployment is increasing. Boys and girls leaving school find it difficult to get jobs, and the service must be expanded. I should like to have some specific information from the Government about the future of this service.
I hope that the Secretary of State will take note of what has been said today about his extremely discourteous attitude to the House. He should have provided us with something that we could get our teeth into by giving us more details.

4.52 p.m.

Mr. J. C. George: This debate has taken an amazing line. It is not so much an indication of a defeat of the Opposition as of a complete and absolute rout. Only once this afternoon have we heard a word on education. For the rest of the time hon. Gentlemen opposite have been wandering about unhappily amid a lot of trivialities.

Mr. Willis: I asked how much was to be spent on school buildings each year. Does the hon. Member consider that a triviality?

Mr. George: If the hon. Member had read the White Paper he would have seen that £65 million is to be authorised.

Mr. Willis: But how much each year?

Mr. George: I admit that the hon. Member thought up one question, and I readily give him credit for that, but it is the only point which has emerged.
I thought that the hon. Member for Glasgow, Central (Mr. McInnes) did himself far less than justice today. We generally look upon him and the hon. Member for Edinburgh, East (Mr. Willis) as virile, well-informed opponents who can advance a strong case whenever there is the slightest opportunity to do so. But not today.

Mr. Willis: We had no information.

Mr. McInnes: Surely the hon. Member for recognises that not a single full-stop or comma in the speech of the Secretary of State or the Order he presented had anything to do with education. How, then, can we deal with the subject?

Mr. George: The hon. Member reminds me that this afternoon we have heard demands for details, and the reason why it was possible to reach agreement with the local authorities. But it is all amicably agreed, so why should everything be repeated over and over again? The whole thing has been agreed.

Mr. T. Fraser: It is not agreed.

Mr. George: I am being charitable to the hon. Member for Glasgow, Central when I say that he made the worst of a very bad case.
The violent opposition which extended from one end of Scotland to the other, and which was stirred up and fanned by hon. Members opposite was not related to details, important as they are, but to the question of education. That was what the fires blazed over during the Committee stage discussions and during the Second Reading debate on the Bill—but not today. There has not been one word about that today except from the hon. Member for Fife, West (Mr. Hamilton).
This White Paper has taken the course which I expected, the inevitable course, because we on this side of the House have clear plans for education—

Mr. Hamilton: We know that.

Mr. George: —and if hon. Members opposite were in doubt about our intentions for education, it would have been more to the point had they expressed their doubts today. But we have not heard a word.
I had no doubt that the general grant would show that we on this side of the House fully realise the tempo at which we have to live today. We know that in this age of scientific advance we can prosper only by producing more and more educated people. That is our intention. Year by year we propose to increase the number of educated people coming from our schools and universities. The old story that education should be cheap and efficient is obsolete. We must look forward to an expansive expensive educational system and the general grant shows that we are prepared to face that fact. We have to meet the challenge in the days that lie ahead. If we do not do so, this country will drop into mediocrity and that is something which hon. Members on this side of the House do not intend shall happen. We shall face the cost of the education system and match the days in which we live. That is shown in the White Paper.

Mr. T. Fraser: Will the hon. Member tell us in which paragraph of the White Paper there is an indication of the intention of the Government to pursue this expansionist policy for education?

Mr. George: I spoke of the White Paper. I should have been more explicit and referred to "Education in Scotland". If the hon. Member had read it—

Mr. Fraser: I have read it. I have seen that the programme of expenditure of £65 million is to begin in the year 1960–61. Despite what was said in the White Paper, we do not know how this expenditure will be incurred.

Mr. George: The hon. Gentleman is too wise in the ways of the House to think that the Government would produce a White Paper of such importance without having based it on very sound

calculations. He knows better than that. It is all clearly stated.

Mr. Fraser: It is not.

Mr. George: During the discussions on the Bill the impression was created that we on this side had laid plans to sabotage education. No other conclusion could be arrived at. Had hon. Gentlemen opposite taken the trouble to examine our performance in this Parliament they would have found sufficient confirmation of our real intention.
Hysterical criticism by teachers has extended from one end of Scotland to the other. The impression was given that the Government intended to sabotage education. On page 30 of a publication entitled, "The Threat to Education" it is stated:
Never before has there been such universal recognition of the extent to which our survival as an industrial and commercial power depends on the improvement of our educational system. This survival must not he placed in jeopardy by the folly of our Government.

Mr. Hamilton: Surely the hon. Gentleman will not let it go out from the House that he is charging the teachers with mass hysteria? He should withdraw that offensive expression.

Mr. George: I am not going to withdraw it. It was hysterical propaganda, based on fear.

Mr. John Rankin: Shame.

Mr. George: Had they examined our performance they would have seen that we had laid a sound basis for proper expansion of the education system. The picture painted was that the Secretary of State would indulge in slashing the grants and smashing education prospects. The folly in that is now revealed. We see steadily rising expenditure to be incurred on the education system in the years ahead.

Mr. Fraser: Where?

Mr. George: The hon. Member for Hamilton (Mr. T. Fraser) approaches this very serious matter with too much levity. So far, the subject has been neglected by the Opposition, and I am now trying to deal with it.

Mr. Fraser: Will the hon. Gentleman tell us where in the White Paper, the


General Grant Order or the other publication to which he has referred there is any evidence of the Government assisting in the financing of this expansive expensive education plan which the hon. Member says the Government support? I am not treating the matter with any levity. It is a very serious matter.

Mr. George: All that one needs to see is the expanding total of expenditure on education. Each year it is rising.

Mr. McInnes: That is because of wages and salaries.

Mr. George: The hon. Member says that it is caused by wages and salaries. If wages and salaries did not rise he would still object. The expenditure on education has increased in real terms. The Parliamentary Secretary to the Ministry of Education yesterday took up that very point, saying that
… between January, 1956, and June, 1958, there was an increase in the retail price index of 10 per cent. During this period, expenditure on education was rising by approximately 14 per cent. Therefore, the real development in education during those years in real terms was somewhere in the region of the difference between 14 and 10 per cent. …"—[OFFICIAL REPORT, 8th December, 1958; Vol. 597, c. 97.]
That is the answer to the hon. Gentleman's interjection.
We have seen the general grant, and it must be a great disappointment to hon. Gentlemen opposite.

Mr. McInnes: And to the hon. Member.

Mr. George: Not to me. It is what I expected. The level of the debate from the other side of the House shows the intense disappointment of the Opposition.
I want to look at the education system in the light of our past performance and future prospects and see what the leading authorities on education say about the performance of the Government. On the technical education side here is what is said by the magazine "Technology", published by The Times:
Millions of pounds are being spent on technological and technical training. Nothing like as great a jump forward has been tried before. It is a revolutionary period.
That is what was said on the question of our technical education, which the Opposition try to deride.
I bring to my assistance John Vaizey, than whom there is no greater authority

on education costs in Britain today. He is the author of an important book, "The Costs of Education". He pointed out in a letter to The Times, on 25th November, that during this Parliament a real, indeed dramatic, advance in education has been achieved, and said that one more surge forward would see our education system placed on a permanent, sound and happy foundation within ten years.
That is the stage which we have reached. Hon. Members on this side of the House are too well aware of their responsibilities to the young and to industry ever to fail in their obligations towards the education system. We know that education must expand, not only in quantity and quality but in complexity, and, therefore, the expense must grow as the years go by. It will grow, and my hon. Friends will see that education is properly catered for and that a sufficient amount of money is allocated to enable local authorities to carry out their duty to the young.
There is a glittering future for Britain in the age that lies ahead if we educate our people to the proper standard. There is a growing realisation among parents that the future of our children lies more and more within the education system. We want to marry the desires of the people, the needs of industry and the challenge of the future, and provide all the finance which is necessary to ensure that our country has the future which it can have if wisely governed in the years immediately ahead.
Ridicule has been poured on the idea that the change to the general grant would make local authority work more attractive and interesting. Throughout the years we have seen it slipping back in quality and interest. The Order ushers in a new era when the authorities will have round sums of money to which they themselves will have to direct close attention to ensure that the money is properly spent. No longer can they simply say, "Spend £x on education, and 60 per cent. will flow from the Government".
The authorities now have to look at the round sum and distribute it carefully in the two years that lie ahead. Without doubt, it will mean great debate in the finance committees of the future. It will mean a decision on priorities and a fight


for priorities, and that can have only a good effect upon local government. We all know that local government needs the injection of some new life if it is to continue to play an important part in government. We want it to survive and be effective.
The Member for Fife, West said that no hon. Member on this side had spoken in favour of the general grant today, but I speak fully and completely in favour of it. My confidence in the Government has been well founded, and I am completely content.

5.57 p.m.

Mr. Hector Hughes: I did not intend to speak in this debate until I heard the speech of the hon. Member for Glasgow, Pollok (Mr. George). I cannot let it pass without comment. It was full of sobs, as though the Government are the only people in favour of the education of the children of Scotland. It was full of emotion, but it was like the Order—vague, full of hypotheses and lacking any concreteness.
Apparently the hon. Member does not appreciate the basis of the Opposition criticism, though it was put very clearly by my hon. Friend the Member for Glasgow, Central (Mr. McInnes), who put categorical questions to the Minister and indicated with great clarity the defects in the Minister's speech. Yet to the hon. Member for Pollok all that has been like water off a duck's back.
The basis of our criticism is the lack of detail. The House is being asked to deal with very large sums of money. The Opposition are very glad to spend large sums of money on the education of the children, and the Labour Government of 1945–50 showed that by the way it legislated for the better education of the children of Scotland and the better remuneration of their teachers. The basis of our criticism has nothing to do with that, but is that sufficient facts are not being put before the House to show why we are being asked to vote these large sums. Parliament is being asked to deal with £50,125,000 for the year beginning 16th May, 1959, and £52,075,000 for the year beginning 16th May, 1960. By all means let us spend money on the education of the children—we all want that to happen—but we want a clear exposition from the Secretary of State about it.
All this is based on Section 1 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, which is as clear as anything could be. Section 2 (1) lays down specific requirements. I quote:
In fixing the aggregate amount of the general grants for any year the Secretary of State shall take into consideration"—
three things. One is
(a) the latest information available to him of the rate of relevant expenditure"—
It is a long subsection, and I will not trouble the House with it, but that is clear and concrete, and the Secretary of State has not put that clearly before the House. The second is
(b) any probable fluctuation in the demand for the services …
mentioned. Neither has the right hon. Gentleman done that, and the House is entitled, when dealing with such large sums, to have it clearly put before it. The third requirement is
(c) the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop those services.
These have not been put specifically and clearly before the House.
Instead of that, we have been offered hypotheses, speculations, estimates and expectations, but where are the concrete facts? I submit that it is the duty of the Government, in asking the House to vote such large sums of money, welcome as they may be, as I have said, for the benefit of the children of Scotland, to put them clearly and precisely before the House.
If we look at the small print on the second page of the Report of the Secretary of State for Scotland under Section 1 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, we find in that print the justification for what I have said about expectations and speculations. Let us look at that small print. In paragraph (a) we find:
The expenditure on welfare services for the disabled does not at present attract grant, and for purposes of general grant account is taken only of development above the 1958–59 level.
Further, it states:
It is not expected … the amount has been estimated … estimates of expenditure"—
The whole of this submission to the House by the Government is full of hypotheses,


estimates, expectations and things of that sort. That is not the way to present a request to the House to vote large sums of money.
Let me end as I began by making clear that we on this side of the House are strongly in favour of the best educational service for the children of Scotland and the best remuneration for the teachers, but I say that, when such an Order as this is presented to the House, welcome as it may be, it is showing disrespect to the House not to adduce in its support concrete facts and figures.

5.14 p.m.

Mr. John Rankin: I am sorry the hon. Member for Glasgow, Pollok (Mr. George) has had to leave his place. We enjoyed his speech. He always speaks with vigour, and at least he does give an impression of conviction, although there was a tendency today to overwhelm that conviction by a somewhat hysterical delivery, which was perhaps imposed upon him by the fact that he had so few supporters on his side.
I note that the figures of estimated expenditure by the local authorities for 1959–60 and 1960–61 have been compiled after consultation with the local authorities, and I assume that when the appropriate departments and the Minister were consulting them about this expenditure they explained to the local authorities that the expenditure comprehended the amount of money which had to be expended in the White Paper called "The Next Step in Education."
I take it that the contents of that White Paper, although they have only now become available to us, were carefully explained to the local authorities and that it was made clear to them that the rise of less than £3 million in expenditure represented the amount which would be spent under the new White Paper which has just been issued. If that is the case, then the explanation which is given on page 3 in paragraph 6 is not complete, because the document before us now—the only one which we have to guide us—tells us that the totals of expenditure were adjusted to take into account—
variations in prices, costs and remuneration … and also of any probable fluctuation in the demand for the relevant services.
That is all. There is no reference there to any future policy such as that outlined by the hon. Member for Pollok.
It is worthy of note that, out of a total amount of £83 million, which is anticipated will be spent by the local authorities in 1960–61, when the new White Paper proposals will be in operation, roughly £72 million will be spent on education. Yet, despite an expenditure of £72 million, the Secretary of State gave us no hint in his Report how that money will be spent—not one word. Surely, when we are dealing with a sum so large as £72 million it is the business and, indeed, the duty of the Secretary of State to tell us what was planned in the expenditure of that money.
I know that it is not our province today to explore "The Next Step in Education," which outlines Tory plans, but that White Paper has been criticised in the newspapers. It has been examined and, as far as its purpose is concerned, most educationists have concluded that under the White Paper policy very little money at all will be spent by the year 1960. Perhaps the Joint Under-Secretary, if he is to reply, may have a word to say on that subject and tell us exactly what is comprehended within this increase of £3 million, with its consequent increase in grant.
I would refer to the fact that the Secretary of State did say in his speech that some £30 million would be consumed in the building of new schools throughout Scotland. Of course, the hon. Member for Pollok will agree with me that in Glasgow we particularly welcome that.
As I have said in speeches in this House on the subject of new schools in Glasgow, not very far from where I live there is a school called Pollok Academy. It is still being used; yet it was condemned in 1925 as not being a place in which children should be taught. It used to be a polling booth in local elections, but the local authority had to stop that use because when parents went into the school to vote they could not find their way out and people had to be employed to rescue them and get them out of the school properly. This school is still packed to capacity.
Is that school now to go out of service and to be replaced by a school built under the new £30 million programme? If that is the case, almost the whole £30 million will be consumed in Glasgow, as we have many schools much worse than


the one I have described. I took a former Joint Under-Secretary of State who was in charge of education to these schools to let him see with his own eyes the problem that faced him in Glasgow. We shall want a great deal of that £30 million to deal merely with the type of school in which our pupils are being taught. When the Joint Under-Secretary of State replies, I should like him to say how much of the £30 million will come to Glasgow.
When the Secretary of State was talking about the next step in education, I did not know whether he referred to the £30 million or the Order which is before us. After the intervention of the hon. Member for Pollok, he will now have to tell us with which part of Tory policy he is dealing when he replies. The right hon. Gentleman said that we needed more than 1,000 teachers right away. I do not know in which pocket the right hon. Gentleman is carrying them, but Glasgow has been seeking for years to get more teachers. We have discussed the matter in this House, and, as the hon. Member for Pollok knows there has been far more animation on this side of the House than on the Government benches about the problems of education. He needs to look hack only to the Estimates debate on education in July, when his was one of the few voices raised from the Government benches.

Mr. T. Fraser: His was one of the few voices on Government benches which were educated in local authority schools.

Mr. Rankin: The Secretary of State is to provide a thousand teachers. That is a tall order, but once again Glasgow could take all those teachers now. The local authority was recently asking for 500 teachers immediately for its secondary schools. Is this part of the next step in the Tory plans for Scottish education, as the hon. Member for Pollok suggested? It involves salaries. We shall not get a thousand teachers easily at the present salaries.
I am sorry to mention again some points which I put before the Secretary of State during the debate in July, when I pointed out that we should not get the 500 or 1,000 teachers that we need now until we paid salaries competitive with those paid in other parts of our economy.

A graduate with first-class or second-class honours can command an initial salary at the level of £2,000 per year, or at least £1,500. Can we get him into the education service at the level of education salaries now being offered? The Observer and the Sunday Times have pages of advertisements every week offering jobs not only in this country but in the Commonwealth to graduates with first-class or second-class honours at salaries that put completely in the shade those offered to teachers. The Secretary of State says he will provide 1,000 teachers; is he bringing the salary level of the teaching profession nearer to the competing demands of industry and other professions? Perhaps the Joint Under-Secretary of State will tell us about these things when he replies.
I gathered from the Secretary of State that the education programme will deal with the county colleges. That is a very welcome step indeed. We have been hoping for something like that for a long while. It should be done and done quickly. There is a gap in our educational system between the ages of 15 and 18 that has been left open for far too long. I take it that the right hon. Gentleman proposes to fill that gap. If so, I welcome this next step in education which the Government propose to take. Where will the right hon. Gentleman find the teaching staff? That brings us back again to the point that if he is to get the staff he must be prepared to pay salaries which will attract men with the proper qualifications into this completely necessary work.
Of course, I support all the hon. Member for Pollok said about the need to develop the technological side of education. He and I have spoken freely on that subject and agree on it. I wonder whether his hon. and right hon. Friends on the Government Front Bench, who may say that they agree with the hon. Member about the need for technological education and providing more money for it, will agree with the hon. Member and me when we demand that the technological university shall be given the same status as the existing university and allowed to award degrees? Unless it has that status it will not produce students of recognised equivalent status in the world outside.
In view of the fact that so many countries are giving to technological universities the right to confer degrees and not have to be brought under the umbrella of general universities, could we hear that in this endeavour to further education the Government are prepared to recognise the status of our technological universities and to give them the right to award their own degrees? It will be interesting to know whether the answer of the Secretary of State to that is in the affirmative or in the negative. If it is in the negative, the next step the Government propose to take and all the money they say they are to spend will not help technological education along the lines it should be going if we are to keep our place in the world.
If it were only to satisfy the hon. Member for Pollok that we on this side of the House are interested in education, I could go on speaking for a long time. If duration of speech were proof of intention, I should be perfectly prepared to overwhelm him with proof, but I believe other business is to follow and, as that other business is to follow at seven o'clock—or is it eight o'clock?—[An HON. MEMBER: "Six o'clock"] Oh, six o'clock? Good heavens! I must apologise to my hon. Friends and to the Government Front Bench. I thought I had until six o'clock in which to finish what I had to say, but in view of the fact—

Mr. Willis: Who said it was six o'clock?

Mr. Rankin: I do not know. Maybe it was a general conspiracy to get me to sit down. I think I have said enough, however, to convince the hon. Member for Pollok that he ought to withdraw many of the things he said and to give the Joint Under-Secretary something to which to reply. I hope he will reply in a very favourable way. On this side of the House we are still dreadfully doubtful of Tory intentions towards education. It may be that we shall be proved wrong tonight. I am a firm enough believer in education to hope that I shall be shown the error of my ways.

5.34 p.m.

Mr. Thomas Fraser: If there is one thing which has come out of this debate, it is that we ought not to have had a debate with the hopelessly

small amount of information we have before us. We have had a White Paper from the Secretary of State which has not said anything at all about the detailed considerations he took into account in arriving at the global figure set out in the General Grant Order.
We have heard criticism from all parts of the House by hon. Members who have said that before they can possibly discuss the Order they need to know what their individual local authorities are to get out of it. There is no doubt in my mind that the right hon. Gentleman had a plain duty in terms of the Act to provide us with much more information than he provided, either in the White Paper or in his speech, or in both put together. We should have had some indication, albeit an estimate, of haw this will affect different local authorities so that that would enable hon. Members to consult local authorities.
It is all right for hon. Members glibly to say that these things were discussed with the local authorities. These things were not discussed with the local authorities. The local authorities did not individually know what they are to get, and the local authorities individually have not even had time up to now to get copies of the General Grant Order to see what the global sum is and how the figure is to move over the years.
The Secretary of State said a bit about education. It is interesting to note that, although education accounts for seven-eighths of all money accounted for in the relevant expenditure of local authorities, the Secretary of State did not find it convenient to say anything at all about education, about the development of our education services, or how these figures were arrived at in the White Paper, which is a report of the considerations which led him to determine certain figures.

Mr. Willis: He is supposed to explain the considerations.

Mr. Fraser: Yes, he does not even mention the considerations, let alone explain them in the Report which is now before us. The hon. Member for Glasgow, Pollok (Mr. George) was surprised that hon. Members had not now set about discussing education as they did when the Bill was going through the House. I believe it is precisely because the Secretary of State did not wish the House to


be in a position to discuss what was happening in education that he failed so lamentably, as my hon. Friend the Member for Glasgow, Central (Mr. McInnes) said, in not saying a word about this in his Report and explaining the considerations he took into account.
The Secretary of State talked about the increase in the number of teachers, the increase in salaries, extensions and expansions of further education services and he talked about the improvements in bursaries provisions. Each time he told us that these were taken into account in arriving at the global figure, but never at any point did he tell us what expenditure was to be incurred in giving effect to these expansions. The Minister of Housing and Local Government in his White Paper dealt with the services one by one. He gave estimates, not in money terms but generally speaking, of the number of people to be employed or assisted in the Heath Service and so on. He gave figures to show how the Service was going over the years. One could easily calculate from that what would be the increase with the rise in current prices. The Secretary of State did not endeavour to do that in his White Paper, nor in his speech.
The hon. Member for Pollok, the only hon. Member who found anything to quarrel with in the speech of my hon. Friend the Member for Glasgow, Central, underlined more effectively than any other hon. Member the aptness of the speech of my hon. Friend. The hon. Member for Pollok, in his flight of fancy this afternoon, described the Tory approach to education. He said, "Our approach is the approach to an expanding education to meet the needs of our people in the future, to develop technical education and to improve secondary education" He foresaw a reduction in the size of classes and the recruitment of new highly skilled teachers ad infinitum.

Mr. Rankin: It is the pantomime season.

Mr. Fraser: My hon. Friend is correct it is the pantomime season.
The hon. Member for Pollok said that all these points were taken care of in the White Paper which reports the increase in local government expenditure in respect of the relevant services. But what do we find? The estimated cost of the education

service for 1959–60 is £69,672,000. For 1960–61, when the White Paper is to become effective, the estimated expenditure is £72,574,000. That is an increase in respect of this service of a little less than 5 per cent. When he takes into account the increasing cost of services, does the hon. Member for Pollok think that we shall even be holding our own if we increase our expenditure by only 5 per cent.? He said that he wanted an expensive education service. Does he think that he will get this great, new, expanding and expensive service out of an increase of less than 5 per cent. in the estimated expenditure on it?
He knows we shall get nothing of the kind. When we are discussing a serious matter of this kind—and the future educational service of Scotland is a serious matter—it is not good enough for an hon. Member as well informed as he is to allow his imagination to run away with him in the way he did this afternoon and to say, "The White Paper shows how much we care about education." He could have remembered that the Convenor of the Education Committee in Glasgow, part of which city he has the honour to represent, made a speech the other day in which he forecast that even in secondary schools there is a possibility of their being driven to part-time education in Glasgow through want of teachers.
The hon. Member drew a picture of an expanding, expensive service which would secure the well-being of our country in the future. It is a great pity that we have not the data in front of us this afternoon to allow us to make a proper examination of the extent to which our education services could possibly be extended in terms of the total figures written into the General Grant Order.
It is for the same reason that we cannot, with profit to ourselves and the people we represent, go into the many other services in detail. We have not been given the details by the Minister either in his White Paper or in his speech. We have therefore not been able to discuss with the local authorities in our constituencies what is their estimate of what they will spend on the different services in the next few years, and we have not been able to relate one with the other in order to see whether adequate provision is being made for the extension of the services which are so essential in our community.
The right hon. Member for Moray and Nairn (Mr. J. Stuart) said that we were encouraging extravagance when we talked about our expanding services, but I did not think the right hon. Gentleman had understood my hon. Friend the Member for Glasgow, Central at all. In any case, he was surely given the answer by the hon. Member for Pollok. It is no extravagance, it is not wasteful expenditure, to extend some of these services, such as education, public health and a great many other services covered by this document. Unfortunately, we have not all the necessary information available to us.
Dealing with the general point—and I believe that the general point is the only one with which we can profitably deal in the debate—I would point out that the local authorities of Scotland were asked to make their estimates of expenditure at a time when we were still fighting inflation and against the background of a whole series of circulars sent out by the Secretary of State. May I refer to the circulars?
On 17th February, 1956, a circular was issued—I have a copy here—placing a virtual embargo on all capital projects other than those relating to public health and to public safety. That was a virtual embargo.

Mr. Willis: It included education.

Mr. Fraser: As my hon. Friend says, it included education. On 10th October, 1956—after the Election of 1955—a further circular was issued continuing this restriction on capital expenditure until further notice.
May I move forward to January of this year, when we were getting ready for the general grant? A circular was issued inviting all local authorities to ensure that all possible economies were achieved both in current expenditure and in the budget for 1958–59. That is this budget. All possible economies had to be effected in building up their expenditure to be met out of the current budget. On 12th June, in case local authorities had forgotten, a circular was sent out mentioning the changes in the administrative procedure and repeating the Government policy that the utmost economy in public expenditure, both on capital and on revenue account, was to be maintained.
It was in that atmosphere and against that background this summer that local authorities made their estimate of expenditure in the year 1959–60 and the year 1960–61. They could do it only at the then ruling prices and against the background of Government policy. I have consulted as many local authority people as I could possibly consult over the weekend, since we received this General Grant Order, and I am bound to tell the right hon. Gentleman and the House that the information which I have been given is that if they could have made their estimate of expenditure now, since recent relaxations and against the background of recent pronouncements, they would have made very different estimates from those which they made last summer.
I think it worth mentioning at this point that on 17th November, after the local authority consultations had been completed about the General Grant Order, Circular No. 9329 was issued. I have a copy of it here. It invited local authorities to carry out in the next twelve months capital expenditure which would otherwise have been incurred later. Is it not a little dishonest for the Government, a bit of sharp practice, to have taken figures of estimated expenditure from the local authorities when they were under this injunction to curtail, restrict and restrain and then, when the estimates have been made in that atmosphere and against that background, to publish the General Grant Order for 1958–59 and for 1960–61; and then to say to the local authorities, "There are things which you wanted to do in 1960–61, but you can do them now in 1959 because you will pay for it yourselves"? That is exactly the position.
The official, who obviously must be nameless, who sent me some of the documents which I have before me, has concluded his report to me in these words:
It may only be coincidence but perhaps there is significance in the fact that this change of direction by the Government comes at a time when the whole financial relationship between the Government and local authorities has altered.
If the local authorities are to give effect to this relaxation, to this expansion in local government services that is now being encouraged, they will have to meet the whole cost from local rates. They will not get any assistance from the central Government.
This Government—this Tory Government, not some other Government—have been doing their utmost in the last three years to keep down public expenditure—I have mentioned the relevant circulars—and, in particular, to keep down the expenditure incurred by local authorities. Notwithstanding that attempt, we find that local authority expenditure has increased more year by year than it is now estimated to increase when we have embarked on a policy of expansion. That is a statement of fact, and if any right hon. or hon. Member opposite wishes to contradict that, I hope he will.
I repeat: the increase in local government expenditure has been greater during the restrictionist period than it is anticipated to be in these next years when local authorities are to be encouraged to incur new capital expenditure. The annual charges on the loans for the provision of new schools and other buildings are a small item compared with the increase in current expenditure on the running of the service, but apparently in his General Grant Order the Secretary of State has not been able to allow for any of this expansion at all.
This brings us back to the debates we had on the Bill. This General Grant Order demonstrates how right we were when this change in the law was being made to point out that when we got a General Grant Order the Secretary of State would succeed in limiting the share of he cost to be borne by the Exchequer, and then in encouraging local authorities to go ahead expanding their services as they would—knowing that they would not be able to do so because of the burden on local taxation.
From time to time, right hon. and hon. Members opposite, including the Secretary of State, boast in public speeches of the way in which this Government have succeeded in reducing central taxation. The real fact is that far more money is raised in central taxation by this Government than was raised by their predecessors in 1951. However, if we take into account the change in the value of money—and it has changed considerably under this Government—they may now be taking a slightly lower proportion of people's earnings than was taken in 1951, but what they cannot deny is that the local authorities, in local rates, take a

bigger share of people's earnings today than was taken in 1951.
That is true of the most Tory authority; Edinburgh, with a Tory Government at Westminster, has doubled its rates in the last seven years. The reason is that in recent years the Government have gradually transferred burdens from the taxpayer to the ratepayer. That is a retrograde step. With the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), I believe that our rating system is the most regressive form of taxation we have; and that it is wrong that we should be easing the burden on the taxpayer and putting an additional burden on the ratepayer.
That is undoubtedly what is happening under this General Grant Order. If the local authorities take the advice given to them in the most recent of the Secretary of State's circulars, that issued on 17th November, there is not a shadow of doubt that they will increase expenditure on relevant services, and the Secretary of State, who under the specific grants legislation some years ago—and, indeed, until now—would have been required to find 25 per cent., 50 per cent., 60 per cent., of the increased cost, will not meet any part of the increase at all. This expansion above that which the local authorities could reasonably estimate when they were acting against the background of restriction and restraint, will have to be met 100 per cent. out of the rates, which is the most regressive form of taxation.
For those reasons, this General Grant Order is very wrong. It is also very wrong that we should be forced into having this debate at all when we have not sufficient information before us. I had thought of quoting from two or three of the several documents that we have before us in order to show how inept they were. I have not done so, but I think that the case is made. We have not sufficient information—the local authorities are still in the dark—and the Secretary of State is getting away with it by not making the Report that the Act says that he ought to make, and by not explaining in detail today the considerations that led him to produce the overall figures set out in the White Paper and in this Order.
The Joint Under-Secretary may fill in some of the gaps left by the right hon. Gentleman's speech, but even if he does


so, I hope that the House and the country will note that it is too late to give the information immediately before the House is asked to approve the Order. The information ought not only to have been made available in time to enable hon. Members to make up their minds, but should have been made available to Scottish local authorities so that hon. Members could have discussed it with them and, in the light of those discussions, have decided whether or not the General Grant Order was adequate to the needs of the day.

5.58 p.m.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon-Browne): The hon. Member for Hamilton (Mr. T. Fraser), like his hon. Friend the Member for Glasgow, Central (Mr. McInnes) and others, has complained about the form of the White Paper. As my right hon. Friend told the hon. Member for Glasgow, Central, we have done this in our own way in Scotland; in a way that we thought would be best and most convenient for the House. I am sorry that hon. Members opposite do not agree with this. My own view is that this should have been a debate on the general grant, not on particular grants, and that is how we thought hon. Members opposite would wish to conduct this debate.
I must take up one thing that the hon. Member for Glasgow, Central said. I was rather disappointed in him. So weak was his case that he had to fall back on misreading paragraph 17 of the original White Paper—and he knew that he was misreading it. He knows quite well that that paragraph, headed "Reduction in Grant," refers to reduction in grant consequent on rerating. In the event, what has happened is that the grants have not been reduced but increased.
He then complained, as did his hon. Friend the Member for Hamilton, that the increase was less than in previous years. Surely he realises that prices have stabilised—

Mr. T. Fraser: Have they?

Mr. Browne: Certainly—[Hors. MEMBERS: "Oh"]—and those cries of alarm make it quite clear to me that right hon. and hon. Members opposite—and here I include the hon. Member for

Orkney and Shetland (Mr. Grimond) and the hon. Member for Fife, West (Mr. Hamilton)—have not got the position perfectly clear.
The Act provides, in Section 2 (2):
If it appears to the Secretary of State that during any grant period any unforeseen increase has taken place in the level of prices, costs or remuneration"—
and so forth, he may issue a new order.

Mr. Hamilton: He may.

Mr. Browne: Yes; but my right hon. Friend has so far scrupulously carried out the provisions of the Act, as I imagine any Secretary of State in any Government would be expected to carry out what he was instructed to do by Statute.
The hon. Member for Hamilton made a case for the expansion of the education estimates, saying that they were too low. He said that it was just a meagre pittance of 5 per cent., and this really was not in keeping with what my hon. Friend the Member for Glasgow, Pollok (Mr. George) had said about Tory policy. The hon. Gentleman may have his own opinion, but he missed one point. This expansion in the estimates is in the loan charges, and, of course, loan charges which are small can hide a very great amount of capital expenditure.
The hon. Member for Hamilton and the hon. Member for Glasgow, Central, regretted that we had given no detailed figures for this increase. It might be as well to make clear now that these figures cannot be published. The new grant is a general grant, not a bundle of specific grants.

Mr. Willis: Before the hon. Gentleman leaves education, will he answer the specific question I asked—

Mr. Browne: The hon. Gentleman knows that before I finish I shall try to answer every point which was raised. I am doing my best.
It would be contrary to the whole intention of the grant if it were possible to say that £X had been provided for, let us say, health services, £Y for fire services, and so on.

Mr. Willis: Why?

Mr. Browne: The essence of the scheme—this is why—is that local authorities are free to spend the general grant


as they wish, and it would be very wrong for the Government to tie strings to it by relating specific parts of the general grant to specific services. The nearest we have thought it right to go in the way of information is set out at the top of page 3 of the White Paper.
The hon. Member for Glasgow, Central Thought he had a very good point when he said, quite rightly, that the acid test was the percentage of grant in relevant expenditure. My right hon. Friend told him that, from 1959 to 1961, the percentage of grant in relevant expenditure had not suffered but had risen, the percentage being 61·4, 61·7, 61·9—

Mr. T. Fraser: Estimated expenditure.

Mr. Browne: All right estimated expenditure—up to 62 per cent. That is not gradually transferring the burden from the taxpayer to the ratepayer, as the hon. Member for Hamilton suggested. It is relieving the ratepayer of a burden.

Mr. Fraser: Ask Edinburgh.

Mr. Browne: The same two hon. Gentlemen asked if the figures were submitted in a climate of reduction or expansion. First of all, the local authorities submitted the figures. They were then revised by my right hon. Friend in a climate of reasonable expansion.

Mr. Fraser: When?

Mr. Browne: After he received the figures of the estimates from local authorities. I cannot give the exact dates.

Mr. Fraser: I am sorry to interrupt again, but I have taken the trouble to inform myself by consulting people in local authorities. They tell me that their estimates were made in the climate of restriction, and I want to know, if it is said that they were told that they could do it in a climate of moderate expansion, when they were so told.

Mr. Browne: I am doing my best to answer the hon. Gentleman, if he will allow me to continue. I understand now that they were advised in October, in a climate of reasonable expansion.
The revisions were sent back to the local authorities, in the fullest detail, chapter and verse being given for every item where any of their figures were varied. Here, I may say that many of them were varied more up than down.

The fullest details were given. I then had the pleasure of meeting the local authorities myself, and we discussed every variation in their estimates, item by item.
The hon. Member for Hamilton drew attention to the circular of 17th November, which invited local authorities to bring expenditure planned for later years forward into 1958–59 and 1959–60. There has been no general relaxation of capital investment by the local authorities. What the circular did was to ask them to plan to bring expenditure forward. If account had been taken of this in the general grant, it might have increased the grant for 1959–60 by a very little at the expense of the grant for 1960–61. Further, I would point out that the relaxation circular, of course, covers a far wider field than the relevant services.
The hon. Member for Glasgow, Central, who always reads the papers very carefully, asked why paragraph 9 of the English Paper says that nothing is included for increases in prices, and our own Paper says that it is included. The real point is this. If the hon. Gentleman will look at the Paper, he will see that the two go hand in hand, and that no provision was made for increases in prices that were not foreseen. In both countries, the increases in prices which were foreseen were allowed for.

Mr. McInnes: I am obliged to the hon. Gentleman for giving way. Do I understand from that that it is the intention of the Secretary of State to instruct local authorities to effect economies in order to meet the rise in wages, prices, and things of that kind?

Mr. Browne: Really, if the hon. Gentleman will read Section 2 (2) of the Act—I have read it once already, and I shall not read it again—he will see that that is allowed for.
The hon. Member for Glasgow, Central asked about provision for mental health. We are awaiting the report of the Scottish Health Services Council, and we shall consider that and have discussions on it. It is unlikely that there will be a considerable increase of expenditure under that head. He asked about domestic help. The figures have been agreed and accepted by the local authorities. He asked about additional welfare centres for mothers and young children. Provision has been made for increases here


compared with what is likely to be provided during the year 1958–59; allowance has been made for an increase.
As regards traffic controls and road crossing patrols, the figures in the table in the White Paper were accepted by the local authorities as providing for reasonable development of these services.
The hon. Member for Glasgow, Govan (Mr. Rankin), in a fighting speech, complained that 1,000 teachers were not enough, though he seemed to have some doubt about where we should find 1,000 teachers anyway.

Mr. Rankin: The thousand was not my figure. It was the figure given by the right hon. Gentleman the Secretary of State.

Mr. Browne: All right. The Secretary of State gave round figures. The real estimate taken from the local authorities was 1,050 teachers. It rises from a figure in 1958–59 of 36,210, to 37,260 in 1960–61. Of this increase 680 will be employed in secondary schools. That figure, I can assure the hon. Gentleman, is based on what we believe can be achieved. Nothing will prevent the recruitment of more teachers if we can get them. That assurance I can give. The hon. Gentleman will realise that the figures I have given take account of the decision to grant indefinite deferment from National Service to virtually all trained teachers.
I cannot say much to the hon. Gentleman the Member for Fife, West, because youth employment is not a relevant service. The hon. Member for Edinburgh, East (Mr. Willis) and the hon. Member for Govan asked how much would be spent by local authorities on educational building. The value of the work to be done during the period 1959–61 is expected to be £29 million, but only a small part of it is included in the £65 million programme under the White Paper, "Education in Scotland: The Next Step", which covers the period 1960–61 to 1964–65. Work on that programme will, of course, not commence until 1960–61.
My hon. Friend the Member for Banff (Mr. Duthie) and the hon. Member for Hamilton complained that we had not complete figures, such as those available in England. My hon. Friend the Member for Banff asked, why buy a pig in a poke? Some pig, at £50 million!
The Scottish distribution formula is contained in the 1958 Act and has not been varied except for the very minor addition of sea miles, since the Scottish White Paper Cmd. 208 showed how a hypothetical general grant of £37 million would be distributed. All local authorities have to do, including my hon. Friend's local authority, is to estimate their share by adjusting the sum in the Appendix to the White Paper to take account of the fact that the revised total of general grant is not £37 million but £50 million.

Mr. Fraser: Cannot the hon. Gentleman tell us that the estimates he made originally ought not to be taken seriously and did not mean anything at all? Why give figures which are so hopelessly irrelevant?

Mr. Browne: This shows how right we were. It was £50 million, not £37 million.

Mr. Duthie: My hon. Friend will admit that this is based on a formula which had never been explained to me or to the House.

Mr. Browne: I will endeavour once more, as I think I have done at least six times before, to explain the position about the formula. There will be no losses in 1959–60, but there will be a gain for all local authorities of £750,000, for which we have had no words of congratulation from right hon. and hon. Members opposite.
That money will be shared according to the formula. In the first year there will be no gains or losses at all. In the second year, 1960–61, when there are gains and losses of 10 per cent., we will know the effects of revaluation and the effects, which worry my hon. Friend the Member for Banff so much, of any weakness in the distribution formula. The hon. Member for Orkney and Shetland was also worried about that point. There will then be an opportunity between 1961 and 1962 to revise the distribution formula if this is thought to be necessary. Up to then, local authorities will have, first, one year with no gains or losses and, secondly, a year with gains and losses of 10 per cent. Then the formula can be looked at again.
Under the wise steering of my right hon. Friend, we have then to enact new arrangements about equalisation grant


and revise the method of calculation. There will be a Measure before the House which will be appropriate for the revision of the formula. The hon. Member for Orkney and Shetland was worried about those with ill luck. We can have another look at it before too much damage is done.
The hon. Member for Edinburgh, East wondered whether the amount allowed in the general grant in respect of compulsory acquisition was sufficient. Some of the figures which the hon. Member quoted were in respect of housing and roads, which are not relevant expenditure.

Mr. Willis: I agree at once that some of the figures I quoted were not relevant expenditure. The figure given by the Secretary of State was an increase of over £300,000. I deducted from that an expected increase of £125,000 or £150,000 for housing, which still leaves £150,000 as compared with £20,000 in the White Paper.

Mr. Browne: I can well understand the hon. Gentleman thinking that there is confusion. The answer is the same as the one I gave to the hon. Member for Hamilton.

Mr. Willis: What is the answer?

Mr. Browne: I shall give the answer. The grant is on loan charges on expenditure, and, if the hon. Member cares to work it out in detail, he will find that the grant is very generous indeed.

Mr. Willis: It does not matter whether the additional expenditure is incurred on loan charges or not. The figure of cost given by the Secretary of State was £300,000. Now it has been reduced to £20,000 in the White Paper. We ought to have an explanation. The matter cannot be brushed off like this.

Mr. Browne: I thought that the hon. Member understood the position better than that. If one buys something, one borrows money to pay for it. If one borrows money to pay for it, one has to pay interest and repay the money, and if one does this, the taxpayer makes a contribution to the ratepayer. That contribution from the taxpayer will be £20,000 in the first year and £40,000 in the second year. That allows for a great deal of capital expenditure.
The main point of the debate, which was raised by the hon. Member for Hamilton concerns the broad principle of the extent of Government assistance from the taxpayer to the ratepayer. Both sides of the House agree that the object of the exercise is to provide the best possible growth in services and to provide the most efficient service possible. It is a matter of nice judgment. It does not matter whether we pay as taxpayers or ratepayers, because they are really one and the same person. If the taxpayer paid too little, rates would go sky high and there would be too little central control. We cannot afford to allow that to happen. If, on the other hand, the taxpayer pays too much, the local authorities become mere cyphers under the dictatorship of bureaucracy. I believe that we have struck the right balance. The degree of financial help which we are giving by the Order is about right, although I shall have a word or two to say about the present degree of central direction.
With regard to financial help, Section 2 (2) deals with any unforeseen increase. For the first time we are giving local authorities a bag of gold. What were the Opposition's prognostications on this point? The Opposition said that this was a Treasury device, that we were letting local authorities down and that we would give local authorities less subsidy. This has not been proved by events. We are giving local authorities greater financial independence.
Let us consider the benefits of this greater financial independence. We must agree that room for manoeuvre is not unlimited. A combination of good sense and of a degree of statutory obligation is required. My right hon. Friend has power to make regulations and in the last resort he has power to reduce the grant. We do not want to make too much of that. Similar powers over the equalisation grant have been available for many years, but they have never been used. What is the position now? If a local authority has a guinea to spend, it says, "If we spend it on health we shall get two guineas' worth of work; if we spend it on the fire services we shall get 28s. worth of work; and if we spend it on non-grant aided services, we shall get only one guinea's worth of work." Under the general grant, what will be the tendency? It will be to spend


money in the best interests of the ratepayers and to put first things first and not feel that by not spending money on a heavily grant-aided service they are missing the grant bus, so to speak.
I now come to the point about which little has been said by hon. Members opposite—and quite rightly, because they do not agree with it. Central dictation by central Departments has gone too far. The general grant is a major loosening of control. I was astonished that all local authorities opposed it. I wonder why? Perhaps it is that the local authorities like somebody else to do their thinking for them and then to put the blame on someone else when things go wrong. Perhaps these prisoners of Socialist freedom have come to love their chains.
I was worried during the course of the Bill about the possibility of a breakdown in relations between central and local government. We are used to opposition from some local authorities to our Bills, but this was a united opposition, except for Edinburgh.

Mr. McInnes: The Joint Under-Secretary said that local authorities do not think for themselves, but yet they can unite in opposition. How does he reconcile that statement?

Mr. Browne: I gave the reason. In any case, I am very pleased indeed that after our last meeting the good relationship with, and the faith that the local authorities have in, central Government has been restored. Nothing that I have heard today has altered that opinion.
We have done more than that in the general grant. By administrative and legislative means, we have swept away a host of minor controls and irritations. We have done a great deal to free the local authorities from the shackles of central Government. Each item is small in itself, but the cumulative effect is very large.
We cannot hope in one operation to take the local authorities out of the deep waters of Socialist theory in which since the war they have been swept ever further from the shore. By this Measure, we have for the first time turned the tide and the local authorities can feel the ground under their feet. I firmly believe—[Interruption.]—I know that hon. Members opposite do not like it—that this Measure will do more than any single

thing the Government have done to instil fresh vigour into local public life and into the understanding and practice of democracy without which the nation cannot long survive. By this Order, and by the Act under which it was laid, we have been fair, even generous, to the local authorities and have made possible those desirable ends that we set out to achieve in the original White Paper.

Question put and agreed to.

Resolved,
That the General Grant (Scotland) Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved.

LOCAL GOVERNMENT COMMISSIONS

6.22 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): I beg to move,
That the Local Government Commission Regulations, 1958, dated 21st November, 1958, a copy of which was laid before this House on 25th November, be approved.
We now come south of the Border. These Regulations are for the guidance of the two Local Government Commissions, one for England and one for Wales. The Local Government Commission for England has already been appointed and, to judge by all the comments which I have heard or read, its composition has given general satisfaction. I hope soon to announce the members of the Local Government Commission for Wales, which has a much less prolonged task before it. I am sure it is right that the Commissions should receive from Parliament any guidance that they need before the New Year, when they will be getting down to the business of the actual reviews.
There has been consultation with the local authority associations during the drafting of these Regulations, and the advice of the associations has led to the incorporation of a number of useful improvements. The Regulations echo some points of the Regulations that were approved by Parliament in 1945 for the old Local Government Boundary Commission. Where there are differences, the reason can usually be found in the difference between the 1958 Act and the 1945


Act, under which the old Boundary Commission functioned.
In 1945, it was a question of a Commission that was expected to be a permanent reviewing body presenting orders direct to Parliament, whereas the present Commissions are to submit proposals to the Minister. In addition, the task of the earlier Commission extended to the boundaries and status of local authorities of all kinds throughout the country. Furthermore, its procedure was not so closely prescribed in the Act. The underlying spirit, of course, is the same in both cases. In both cases it is a question of guidance.
The Commissions must be free, provided they have taken into account all the matters prescribed in the Regulations, to formulate their own proposals in relation to each particular case. Indeed, these Regulations do not essay to give the Commissions detailed guidance in every one of the possible situations that may arise. There will certainly be cases where, subject to the general guidance of the Regulations, matters are best left to the words of the Act and to the commonsense of the Commissions.
I expect that the House would like me to go briefly through the various Regulations. The first point that the House may care to note is the reference in the latter part of Regulation 2 to "review areas" The five "special review areas" are defined in the Third Schedule to the Act—although they can be added to by Order under Section 17 of the Act, and can be varied by Order under Section 25. Outside the special review areas, the Act provides that the Commissions must divide up England or Wales, as the case may be, into such areas as they think fit—subject to a ministerial power of direction, which, I hope, will never need to be used.
What is envisaged is that in England, and possibly also in Wales, these areas will usually be quite sizeable ones, each covering two or more geographical counties. The Commission for England is expected to announce by about the end of this year which such areas, in addition to any special review area, it proposes to deal with first.
Regulation 3 reminds the Commissions that, even though their review area may be a large one, they must not ignore the relationship between the local govern-

ment problems inside it and those of neighbouring areas. It reminds the Commissions, also, that the aim must be local government units which are both effective and convenient, individually and collectively.
Regulation 4 stresses the importance of looking to the future, too, and not solely at the existing circumstances. Local government serves needs and has problems which never stand still, and the Commissions must not look solely at the existing point in time. This consideration was raised on several occasions during the passage of the Act and I promised that note would be taken of it.
Regulations 5 and 6 provide some kind of measuring rod with which the Commissions can help themselves in judging whether any existing or contemplated organisation of local government in any review area is or is not "effective and convenient," those being the criteria laid down in the Act. They are not bound to apply only the criteria mentioned in these two Regulations. What they are required to do is to include among the factors which they take into account these points in the two Regulations.
In Regulation 7 the House will recognise some old favourites—the so-called nine factors, which were prescribed for the old Boundary Commission in 1945 in almost identical terms. They have simply been brought up to date in the light of present day circumstances. Regulations 8 to 10 touch on the difficult question of the creation of new county boroughs. These Regulations have been carefully worded. I am not anxious to put any gloss on them. My hon. Friend the Parliamentary Secretary will gladly answer any questions that may arise.
Regulation 11 deals with extensions by existing or proposed county boroughs into the areas of neighbouring county districts. Its effect is intended to be that normally—I say "normally" although, of course, there may be exceptions, which the Commissions will have to justify—a county borough should not be extended to take in a neighbouring area merely because that area is neighbouring. There must be a real link, or there must be at least a prospect of a real link. Furthermore, the proposed added area should normally be an urban area, or one that is likely to become urban. After all, we are


dealing with big towns—the county boroughs.
This Regulation also reminds all concerned, the Commission and the local authorities, that when a prospect of development is claimed to exist the claim will have much more weight if it can be shown to be consonant with a current development plan or current planning permission. The Commission will have to form its own judgment of development prospects, but it is not itself a planning authority, nor has it any appellate jurisdiction in planning matters.
The Commission for England is reminded by Regulation 12 to consider, as soon as practicable after the beginning of a special review of an area, whether there is need for any adjustment to the territorial scope of the special review. That will be the occasion for any anxious local authorities in the special review area, or on the fringe of it, to put a case if they so wish—it is entirely at their discretion—for inclusion in the area or for exclusion from it. That applies only to the Local Government Commission for England, because it will be remembered that in the passage of the Act through Committee we provided that special review areas could not be created in Wales.
Regulation 13 reminds the Commission of the main reasons why these special review areas are singled out for special treatment in the Act. When it is examining an area of that character, the Commission must ask itself whether the area possesses, in fact, such features as to justify the use of the special proposal-making powers which the Act provides.
Regulation 14 ought to allay the anxieties of those who harbour a fear lest a county half inside a special review area and half outside it might find itself reviewed in two completely separate operations. In practice, what is expected is that when the Commission comes to review a special review area, about the same time it will deal with another review area including the surrounding county areas. Its proposals for the two review areas would then be arrived at together.
Regulation 15 is chiefly of importance in the possible case where the Commission is considering leaving the pattern in a

special review area much as it is now, except for some adjustments of boundaries and amalgamations of small units. This Regulation will remind the Commission of the fact that the range of functions available for exercise by county districts will depend, among other things, upon their size. Broadly speaking, the bigger the county district the greater its chances of adding to its responsibilities by getting delegated powers from the county.
Regulation 16 is addressed to the possible alternative case where the Commission is considering dividing a special review area, or part of it, into county boroughs, including possibly some new ones. That solution, which, of course, would eliminate all county districts in that area or part of an area, would presumably be adopted only where it was clear that there were at present too many different authorities for the good local government health of the area. It seems reasonable, therefore, in such a case, that a Commission should be invited to think twice before proposing to divide the area among too many separate authorities again.
Regulation 17 is concerned with a third alternative which the Commission can propose—that is, the special county with a special distribution of functions between county and districts. The aim is to avoid a structure that is either too top-heavy or too bottom-heavy.
Regulation 18 rounds off these references to these three alternative possibilities of change in a special review area by inviting the Commission's attention to its power to appoint joint boards. That power may in some cases assist the Commission in coming to its choice, and, after it has come to its choice, in working out the best detailed proposals.
Regulations 19 to 22 are concerned solely with matters of procedure and are self-explanatory.
These Regulations before us are not necessarily final. They can be amended in the light of subsequent experience, if need is shown, but I invite the House to endorse them as they are and to send them on with the good wishes of Parliament to the two Commissions in their difficult and responsible tasks.

6.37 p.m.

Mr. G. Lindgren: I am sure that the House will be obliged


to the Minister for having given his detailed explanation of these Regulations. I take it that we are not here this evening to discuss whether or not the Regulations are the best method by which the Commissions can deal with this problem. We have had hours of discussion in Cornmittee, on Report and Third Reading and the Minister has the authority of the House for the Regulations. Therefore, I and my right hon. and hon. Friends do not propose to contest them.
There are, however, one or two points arising from the Regulations with which I should like the Parliamentary Secretary to deal when he replies to the debate. First, the Minister quite fairly pointed out that there is a difference between the operation of the Commissions under the Local Government Act, 1958, and their operation under the Local Government (Boundary Commission) Act, 1945. As the Minister said, under the 1945 Act the Boundary Commission made its report and recommendations direct to Parliament. In this instance, the Commission's report and recommendations are made to the Minister. He considers them and makes an Order to be placed before Parliament. The Minister's Order, following the Commissions' reports, may have no relationship at all to the factors in the Commissions' reports.
The Minister can vary the report, he can act on the Regulations or modify them, or he can make no report at all within the light of his desires following the report. What is not clear to me—it may be in the Act, but I could not find it when I looked this afternoon—is whether there is any way by which the Minister is obliged to place before the House the report and recommendations of the Local Government Commission. Therefore I should be glad if the Parliamentary Secretary will tell us whether or not, after 10 reports have been made to the Minister and he has considered them, the House will have the opportunity of seeing the report and recommendations of the Local Government Commission as well as the Order which the Minister proposes to make following that report.
Regulation 22 gives the Minister the power to give directions to the Local Government Commission during the course of its operations. It is my view that any such direction should at least be on general principles acceptable both

to the local authorities and to the House of Commons. After all, these Regulations are based upon authority given to the Minister in the 1958 Act. In preparing them, as the Minister has informed the House, he has consulted the local authorities and has made provision within them for suggestions made to him by local authorities during those negotiations. If, during the course of the Commission's work, the Minister gives directions, I would like to know what opportunity will be given to the House to know that the right hon. Gentleman has given such directions, and whether there will be any prior consultation with local authorities. It is important to keep to the general principle of consultation and to know that the Commission is being directed in accordance with the principle which has so far been accepted by the House and by the local authorities.
My only other point arises under Regulation 19. Here the Commission is rightly requested to keep the Minister informed of the programme of the reviews. Not only is the programme important, as the Minister said during his explanation, but equally important is the question of the timetable. We have a Commission for England to deal with special review areas and with the boundaries of counties and county boroughs. When does the Minister think that the report of the Commission is likely to be ready for presentation to him? What timetable has he arranged in his own Ministry?
At present, local government is in a state of uncertainty. Uncertainty at any time is not good for administration and it is particularly bad for local government. It may be that many local authorities are making excuses for not doing the things they should do. As an example, there are many counties where the revision of electoral divisions is long overdue because of changes in its population. The same applies in many county districts, but both counties and county districts are saying at present that they will not review their electoral divisions because some time there will be a general county review and they can deal with the change of boundaries of electoral divisions at the same time as they are considering the revision of local authority areas That is understandable, but it is


undesirable if the report of the Commission is to be presented to the Minister and acted upon by the Minister within a reasonable period.
I do not want to be pessimistic. I am generally optimistic, but in my view the work of the Local Government Commission is bound to take a considerable time. I would like to hear from the Parliamentary Secretary when his right hon. Friend estimates that he will receive the report of the Commission on the special review areas and on the county and county borough areas. We do not expect him to give actual dates, but it would help the local authorities to know whether, in introducing these Regulations, the Government believe it will be five, ten, fifteen or twenty years before we get the complete revision of our administrative areas. At the moment we only know that a task of this character must take a considerable time.
In the light of any information that the Minister may be able to give the House this evening local authorities will be able to undertake other duties which ought to be undertaken. If it is to take a long time we can go along normally doing the things that ought to be done and carry on the day to day administration which is being held up.
Apart from those general questions to the Parliamentary Secretary, my right hon. and hon. Friends on this side of the House are prepared to let the Minister have these Regulations. We wish the Local Government Commission well in its work, and equally we wish that its report will be speedy so that we may get the revision of the administrative areas of the country settled for some time to come.

6.48 p.m.

Mr. John M. Temple: I welcome this opportunity to say a few words about these Regulations and I endorse what has been said by the hon. Gentleman the Member for Wellingborough (Mr. Lindgren) about the essential quality of reasonable speed in setting about the tasks of the Local Government Commission.
I feel sure that local government administration in any services, and, in particular, education, is waiting upon the determination of the new boundaries. So I add my plea to my right hon. Friend to impress upon the Commission that reasonable speed will be of considerable

help throughout the country. I am speaking on these Regulations because I feel that I have a special responsibility, having advocated, during the Committee stage, of the Bill that my right hon. Friend should bring forward these instructions in the form of Regulations which have been welcomed by many local authorities.
I welcome one new feature which has emerged in the Regulations, namely, the reference to council members and also to the general public. This reference to council members and their ability to get to the places of administration of local government is an important new feature. We should do everything we can to encourage voluntary workers to play their part in local government. The low polls in local government elections are deplorable, and the reference to local council members and also to the general public will mean that both will know that the Commission is thinking of them during this reorganisation.
I have one point to put to the Parliamentary Secretary in connection with special review areas. It arises from Regulation 14. I welcome the fact that when a special review area within a county is being reviewed another special review area will be reviewed at the same time, up to the point of at least the "initial stages" of the second review being taken into consideration. I noticed that my right hon. Friend said that that would include surrounding county areas as well. Will it include the initial stages of the county review and the reviews of county boroughs within that county? When there are two special review areas, as in Cheshire, the reviewing commission must undertake its review on a zonal basis. I should like the Parliamentary Secretary to deal with that point.
I give a general welcome to the Commission and wish it every success in a task which is formidable. Its task may be made considerably easier if there are consultations at local level between the local authorities concerned in advance of the Commission's arrival. I believe that local authorities can achieve a great deal by starting these local consultations here and now. Knowing local conditions, councils will be in a position to suggest an outline of the new local government boundaries. That outline may not be acceptable, but at least it will be made in the knowledge of local conditions.
The Regulations offer local government an opportunity of reorganise which may not occur again in the lifetime of many councillors. The test of whether the review is to be successful will be what is best for the community. That must be the governing spirit and not what is best for an individual council.

6.52 p.m.

Mr. Tudor Watkins: Some hon. Members believe that the Regulations are marching orders for the Boundary Commission. However, that is not true for Wales because the Commission has not yet been appointed. I understand the Minister's difficulties. It may be that the House has placed on him a difficult burden in asking him to find people who can speak Welsh. It may be that another difficulty is that all the good local government men in Wales already belong to local government, so that it is difficult to find someone appropriate to appoint to the Commission.

Mr. H. Brooke: I share with the hon. Member the desire that the Commission will be quickly set up. I hope that I may be able to make an announcement before the House rises for the Recess. The hon. Member will recognise that some of the largest local government areas in Wales are those which may be affected by the Commission's recommendations. It would thus be invidious to appoint to the Commission some of the people who might otherwise have been obvious choices.

Mr. Speaker: There is nothing about the composition of the Commission in the Regulations.

Mr. Watkins: I was saying that the Regulations are considered to be marching orders, but marching orders cannot be given to anybody who is still standing still. I leave it at that.
I hope that when it is appointed the Commission will have regard to Regulations 4, 5 and 6. Will the Parliamentary Secretary indicate what guidance will be given in the circulars to local authorities? For instance, will they be asked to get in touch with the Commission, or will the Commission get in touch with individual authorities?
The Minister suggested that there might be two or three authorities who would come under one review. Authorities are

anxious to know which local authorities might be included in such arrangements. I am anxious to know in what way the Commission will proceed, whether it will start on the coast and work towards mid-Wales, or whether it will start in mid-Wales and work towards the coast.
The Regulations say that future as well as existing circumstances will be considered. I hope that that means that the depopulation of rural mid-Wales will be taken into account, so that in the new set-up some industrial areas will be tied to rural areas to help to increase rateable values of rural counties, thus combating depopulation of rural areas.
I agree about the importance of ease of travelling to administrative centres. In the Report of the 1948 Boundary Commission, there were four separate proposals for Brecon and Radnor. It is difficult to travel in that area, and I am glad that the importance of travel facilities has been emphasised. I do not want a repetition of what has occurred with the mid-Wales police authority, where three counties are involved and where the Commission may consider that it is undesirable that the chief constable should live in Newton, more than 100 miles from the biggest industrial centre.
I was glad to find that the nine factors are listed alphabetically, but I hope that the Commission will not think that that is an order of importance. Community of interest may be very important. especially where there is a Welsh community, or an English community, in Wales. I could detain the House for a very long time while selecting which is the most important of those nine factors.
The Minister will be aware of the adage which says that a false step is worse than standing still. I hope that this step for Wales will not give the Government the false idea that they can borrow ideas from the English Commission, which may work for weeks, and then compel Wales to follow suit. I am glad that the names of the members of the Welsh Commission are to be announced before the Christmas Recess.

6.58 p.m.

Mr. R. Moss: My hon. Friend the Member for Wellingborough (Mr. Lindgren) has pointed out that we are concerned not with the form of the instructions, but with their nature. In


that respect, the Minister has done a good job. He was right when he said that the Regulations did not pretend to give detailed instructions about every possible situation which could arise. If I refer to specific situations it is not because I object to the Regulations as a whole, but because I want to illustrate some of the problems which may arise when the Commission does its work.
I am pleased to see, in Regulation No. 3 the words:
effective and convenient local government throughout the whole of the review area and not merely in individual areas of local government.
In addition, there are the important words:
regard being had also to the circumstances and needs of related review areas.
This Regulation has to be taken in conjunction with Regulation 14, which was referred to by the hon. Member for the City of Chester (Mr. Temple). I suspect that the hon. Member misread that Regulation, because it does not refer to a county being affected by two special review areas. It reads:
Before finally formulating any proposals for a special review area which includes only part of an administrative county the Commission shall complete at least the initial stages of their review of any review area which includes another part of that county.

Mr. Temple: Regulation 2 (2) says that:
'review area' means a special review area".
With due deference to the hon. Member, I think that I may be correct.

Mr. Moss: I am much obliged to the hon. Member; I think he probably is correct. In that case, the point that I want to make is that an administrative county which is affected by the review of a special review area is also, at the same time, affected by the ordinary reviews of local government areas. I thought that that was what the hon. Member was trying to say, but he obviously was not.

Mr. G. R. Mitchison: The hon. Member for the City of Chester (Mr. Temple) did not complete the definition. He will find that a review area means
a special review area … or, outside special review areas, any area for which a review is held by the Commission. …

Mr. Denis Howell: My hon. Friend the Member for

Meriden (Mr. Moss) and the hon. Member for the City of Chester (Mr. Temple) are both right.

Mr. Moss: I think that the hon. Member for the City of Chester will agree that that is a very nice solution, especially as we are getting near to Christmas.
Three counties in the West Midlands are affected—Warwickshire, Staffordshire and Worcestershire—but the Parliamentary Secretary will know that in Warwickshire there is also the County Borough of Coventry, which may have its own boundaries altered to the disadvantage of Warwickshire. I would hope that if the parishes of Kingshurst and Castle Bromwich were included in a local government structure for the West Midlands conurbation, the Commission would also have to consider what might happen in reviewing the boundaries of the existing county borough in Warwickshire.

Mr. D. Howell: We must get this right. When my hon. Friend refers to the County Borough of Coventry and mentions the village of Kingshurst, I presume he means the County Borough of Birmingham, as Kingshurst is adjacent to Birmingham and not to Coventry.

Mr. Moss: No, I do not; I am pointing out that the Commission, in reviewing the West Midlands conurbation, may take out of the County of Warwick certain parts of the present administrative county. At the same time, the boundaries of the City of Coventry may be extended, also to the disadvantage of the county. I am not suggesting that that will happen, but the Commission will have to bear in mind all these possibilities.
A third possibility is that a change may be made which will affect two counties. The Borough of Tamworth is in the County of Stafford, while the adjacent areas are in the Tamworth rural district and the County of Warwick. A change may be made affecting the County of Warwick. I suggest that no change should be made at Kingshurst and Castle Bromwich, or at Tamworth or Coventry, in isolation. They should all be considered together because of their ultimate total effect upon the County of Warwick. It is obvious that no decisions can be made without considering a very wide area. Paragraph 21 of the White Paper.


"Areas and Status of Local Authorities in England and Wales" says:
assessing the wider repercussions of proposed changes upon other authorities affected.
I now turn to Regulation 6, which was also mentioned by the hon. Member for the City of Chester. This Regulation mentions
the access of council members and the general public to their local administrative centres.
Travelling facilities, both within and between local government areas, are mentioned. Here again, it is obviously impossible to lay down regulations affecting particular cases. I represent three rural districts surrounded by a number of urban centres, namely, Solihull, Birmingham, Sutton Coldfield, Tamworth, Nuneaton, Bedworth, Coventry, and Kenilworth. They form a circle round my constituency, and routes tend to interconnect these urban centres and, in the case of Birmingham and Coventry, to converge upon them. What is left inside my constituency is rather a by-product of the fact that it is surrounded by centres of urban population.
Local authorities should not necessarily be regarded as inefficient because they are so placed. I find it extremely difficult to get from one part of my constituency to another. Rural areas have these transport problems, and they ought not to be compared in this respect with more highly developed places which may have better means of communication.
Regulation 11 (a) refers to special links which may exist between a local government structure and an area which is at present outside it, but which may possibly be included in it by the Commission. My hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell) smiles; he probably anticipates to what area I am referring. Links between these areas are bound to arise from mere proximity. In the case of Kingshurst, just outside the City of Birmingham, the obvious link is that the inhabitants have come from Birmingham while their relatives may still live inside the City.
There are other special links. Houses have been built in Kingshurst to provide homes for the overspill population of Birmingham; indeed, tenants of Kingshurst, living in the Meriden rural district, have been complaining to the City of

Birmingham Corporation about their rents, because that Corporation receives their rents. That is a special link, but it has arisen from past co-operation between a county district and a great city, in an attempt to find a solution to the overspill population problem. I do not think that special link should count against the Meriden rural district because it exists as a result of its co-operation with the City of Birmingham in the past.
I should like to refer to Regulation 11 (b), which deals in a general way with the areas which may develop into town areas. There is no mention of the fact that such development may be considered undesirable. It may be desirable and it may be policy to preserve the green belt. The City of Birmingham has expressed itself as being in favour of an extension of boundaries.
Although I attach no significance to that, it means that the City of Birmingham will advocate before the Commission an extension of its boundaries as a solution of its housing problem. This is a fringe extension and I should like to have seen in the Regulations something requiring the Commission to take note of the best means of preserving the green belt where it exists and pointing out to the Commission that that might best be done by leaving the county areas where they are at present.
The need to preserve the green belt should be one of the factors to be considered. Again, this is a particular circumstance, but it must apply to many areas in this country and I can find no reference to it. However, paragraph 32 of the White Paper, "Areas and Status of Local Authorities in England and Wales" states that a county borough wishing to extend its boundaries would have to show whether such extension was justified, that the area claimed was not excessive and what the consequences would be for the county or counties affected. The White Paper went on to say that the onus should be placed on the county borough to prove that the advantages to its own inhabitants would outweigh the disadvantages caused to the county or counties concerned. I can find no mention of that in these Regulations and perhaps the Parliamentary Secretary will be prepared to say something about it when he sums up the debate.
The special review areas are, of course, narrowly defined. We dealt with all that in Committee. I got the impression in Committee that only slight adjustments were permitted. Section 25 (1) of the Local Government Act, which refers to these Regulations, enables the Minister to vary a special review area by Order; while Section 25 (2) of the Act enables the Commission to do so subject to negative control by the Minister within a period of two months. I take it that that is still the position, particularly as regards Section 25 (2), that only slight modifications are intended.
Regulation 13 (d) seems to me to be a little vague. It would seem to exclude overspill populations except in so far as overspill population problems might be resolved more successfully when considered by the exporting area as a whole. Regulation 5 would also seem to exclude overspill population problems. Dealing with the overspill population problem is one of the most important functions of local government. I wonder whether the Parliamentary Secretary could say how far it is possible for Regulation 18 to be applied to a solution of the overspill population problem so far as a special review area as a whole is concerned. Could a joint authority be set up to negotiate with other authorities for the reception of overspill population?
Regulation 6 brings in the access of council members and the general public to their local administrative centres. I find this difficult to understand. In rural districts, villages are often remote from administrative centres. Any right hon. Gentleman who thinks that houses constructed in one village in a rural district may help the inhabitants of another village in that rural district is wide of the mark. The English have a habit of not living in accordance with administrative convenience. I do not quite understand how this Regulation applies to the efficiency of rural district authorities. In my experience, it is always difficult to get to an administrative centre of a rural district from some other part of that district.
Finally, I refer to Regulation 7, which puts the nine principles in alphabetical order and the "Wishes of the inhabitants" last in alphabetical order. My own view is that the wishes of the inhabitants are extremely important in any

democratic society. I call the attention of the right hon. Gentleman to the White Paper "Areas and Status of Local Authorities in England and Wales" paragraph 16, where reference is made to "local loyalties and civic pride" being a source of strength in local government. Apart from these few criticisms, I think that the Regulations generally are to be commended and I wish the right hon. Gentleman and the Local Government Commission success in their work.

7.20 p.m.

Mr. George Chetwynd: I welcome these Regulations because I believe they are an earnest that, at long last, the Government are getting on with the job of local government reform, and that the Commission is in a position to undertake its task. I understand that the Commission has already been in touch with different local authorities and requested them to make their representations, so that it may frame its programme and begin operations in the new year. I also welcome the personnel of the Commission. It is completely unbiassed and I think that it will face its problems in an objective way. I do not know whether in his original announcement the Minister mentioned all the members of the Commission, but if so, I suggest, in view of the scale of its operations, that two or three more members should be added to it.
I should like more information about the order of its work. In dealing with a special review area, automatically the Commission will have to take into account the effect on surrounding areas, adjacent counties and so on. For example, when the Commission comes to Tyneside to deal with the special review area there, obviously it will not be able to reach any satisfactory solution without taking into account the effect on both the County of Northumberland and the County of Durham. It cannot settle the problems of the County of Durham without taking into account the problems of Tees-side. It cannot settle that problem without considering the problem of North Yorkshire—and so on.
That will mean that the actual review area will be extremely large, and it will be a long time before anything is settled. I wonder, therefore, whether that is the kind of review area which the Commission will have in mind. If so, I suggest


that the Commission will need strengthening in order to bring these proceedings to a successful conclusion in anything like a reasonable time. I thought that my hon. Friend the Member for Wellingborough (Mr. Lindgren) was unduly pessimistic in referring to a period of ten to fifteen years, but if this be the kind of problem which has to be faced, he may well be right. My view is that we have waited long enough for a review to take place, and the sooner it can be carried out, the better.
I wish to know whether the Commission will be able to tackle a number of areas simultaneously, as the previous Commission was able. Will it be possible for the Commission to divide itself into small sub-committees which would receive evidence, and so on, and issue separate reports? Otherwise the rush of local authorities to get into the queue for priority will be great, and may lead to unnecessary unpleasantness.
Regulation 20, which deals with notices of reviews, specifies that there should be a period of not less than eight weeks before a review is entered upon. That is rather a long time. Most of these local authorities have been living with this question for a considerable period, and I am not sure that they would need as long as eight weeks to prepare their case, or to issue the local notices, or to mobilise public opinion. I hope that the period may be shortened.
The point was raised during the Report stage about the figure of 100,000 population being the minimum for considering the conversion of a non-county borough into a county borough. I am satisfied that the Minister has dealt with this matter effectively in Regulation 9. It meets all the criticisms which were made and is a very fair statement
Regulation 10 states:
The Commission shall not in any case propose the constitution of a new county borough in an area forming part of one or more administrative counties unless they are satisfied …
It seems clear that the Commission is free to take one part of a county from that county and put it into another county to make a new county borough. That was one of the stumbling blocks which confronted the old Commission. I trust

that my interpretation is correct, because this may affect my own constituency.
I hope it is not meant that the nine factors referred to in Regulation 7 will have to be taken into account in every case. Obviously, there are many areas where some of them will not apply and I hope that it will be sufficient if the Commission pays general regard to factors of that kind. Another point made by my hon. Friend the Member for Wellingborough which I wish to emphasise is the necessity to keep Parliament informed of the Commission's progress. The Commission has an obligation to keep the Minister informed of its programme of reviews, and I hope the Minister will consider it his duty to acquaint Parliament with whatever the Commission brings to his notice, either by arranging for a Question to be asked, or by making a statement, or in some other way. It is important that we should keep track of the work of the Commission so that we may know it is getting on with the job we intended it to do.
When reports are made to the Minister, as is laid down in the Regulations, it is essential that they should be printed and the public notified as well as hon. Members of this House, so that we may be aware of the decisions taken by the Minister and informed whether they are in line with recommendations made by the Commission or against them. It is my hope that the Commission will now be able to get on with its job and that we shall not have to wait too long for its recommendations.

7.26 p.m.

Mr. J. A. Sparks: Regulation 7 states:
The following (placed in alphabetical order) are to be included among the factors taken into account by the Commission on the holding of a review.
Then there follow nine factors, which, I presume, are part of the wider considerations that the Commission will take into account from time to time regarding review areas.
Is the Minister trying to evolve a pattern of local government into which he will place the services administered by the local authorities; or is he proposing to attempt to fit a local government structure on to those services? This is a very important matter. We cannot juggle with the creation of boundaries


of one kind or another without taking account of the wide range of services which are vital to the country and to local authorities. I should like the right hon. Gentleman to tell us whether one of the prime considerations will be the study of the services to be administered by local authorities. Otherwise, he may find that a structure of local government is created which is uneconomic when related to the services to be administered. These include education, the fire service, the health service, housing, libraries, licensing, the protection of the public, parks and open spaces, transport, sanitation, sewage disposal, street lighting, town and country planning and welfare services, all of which involve substantial expenditure on behalf of the State and the ratepayers.
Above all else we desire to see a wide variety of services administered by the local authorities in an efficient and effective manner with a minimum of expenditure. The Commission might not reach that objective if it is obsessed with the idea of creating a structure without any relation to the economic administration of these vital and important services.
The Commissioners will undoubtedly find themselves engaged in a very difficult problem. There is a great deal of parochialism in local government. Even a parish council fights for more powers. It is generally anti-county council and all for parish councils. We ought to try to overcome what appears to be a vested interest in this matter. I do not know whether these Regulations provide for that. It may be that they do. If so, I hope the Minister will tell us. In the restriction of boundaries of local authorities and the creation of various grades of local authority administration I should like to see, for instance, on the county councils a certain proportion of rural district councillors and urban district councillors, or members of non-county boroughs. We want a closer tie-up as between the lower and higher tiers.
I do not know, Mr. Speaker, whether I am in order in saying this because I see you getting nearer and nearer to the edge of your seat. If the Commissioners are to succeed in their main purpose of creating a machine which is to function effectively and efficiently in the administration of the service the State entrusts to them, we must have a better under-

standing on the part of the parish councillor of the responsibilities of the county and vice versa. That, coupled with the most effective administration of the services fitted into the appropriate structure, will achieve the main purpose.
I hope that the right hon. Gentleman will be able to expedite the work of the Commission and that without undue delay we shall receive its reports, because this is a long overdue measure. Despite all the difficulties the Commissioners undoubtedly will meet, the sooner they are able to bring to us a reformed structure of local government, bearing in mind the many other aspects of the problem already mentioned, the better it will be for local government.

7.34 p.m.

Mr. Denis Howell: I did not intend to take part in this debate until my hon. Friend the Member for Meriden (Mr. Moss) spoke. On many occasions he and I have contested what should happen to the West Midlands conurbation. Probably we are not now so far apart as when we started this argument.
If my hon. Friend is right in saying that the wishes of the inhabitants should be the most important consideration, he will be placing his local authority in a difficult position when the residents on the Kingshurst Estate are asked to state their wishes. They come from Birmingham, live in Birmingham municipal houses and pay rates in Birmingham. There is not a very good service of buses and there is not much doubt where those residents' wishes lie. I urge caution upon my hon. Friend. I do not want to see him go from this House, but I am afraid that if the local government wishes of his constituents in that area are taken into consideration, that might make a large hole in his constituency, if not in his majority, and that I should not like to see.
I am perplexed, as I have been all through this business. I ought to say so again now, because my hon. Friend the Member for Wellingborough (Mr. Lindgren) said that it will be ten or fifteen years before we reach finality in the matter and it would be a serious step to allow these Regulations to go without making the point I have made before, that I do not see how the Commission, under its terms of reference and these


Regulations, can produce satisfactory solutions to the problem which will confront it.
I am pleased to see Regulation 12. According to that, the first thing that the Commission has to do is to consider the special review areas and to tell the Minister whether it thinks that they are wide enough. I wanted to see something like that in the Act, although my efforts may not have been recognised as being in that direction. I do not see how the Commission can carry out Regulation 12 immediately. I do not see how it can tell the Minister that the West Midlands conurbation as defined in the Act is not large enough to do certain specific tasks laid down in the Regulations. It cannot do that at the beginning of its deliberations, because it has to take the evidence and look at the problems before it can reach such a conclusion.
I should be interested if the Parliamentary Secretary could tell us how he envisages that Regulation 12 will work out in practice. I understand that the West Midlands conurbation will be one of the first to be reviewed. The question of overspill, which my hon. Friend the Member for Meriden rightly mentioned as an important factor, is a question for every one of the authorities, with the exception of Warwickshire County Council. I understand the anxiety of my hon. Friend on this. All the other local authorities are without land, they are built up and have terrific problems in housing the homeless and dealing with the movement of industry.
The Commission, under Regulation 11 (b) has to have regard to
The question whether, if the area is not already built-up, the use of the land in accordance with the development plan or in the manner authorised by permission to develop land granted on application in that behalf is likely to lead to its development into such a continuation of a town area as is indicated in paragraph (a) within such period as the Commission think it right to consider in the circumstances of the particular case;".
That looks well on paper, but all of us know what is in these development plans. I know what is in the development plans of all the county councils adjacent to Birmingham. I am not blaming them for wanting to maintain a green belt. There is great force in that argument and in my view it is in the national interest that a green belt should not be gobbled up higgledy-piggledy by large towns.
I say that although it puts me on dangerous ground in Birmingham. It is a factor which has to be taken into consideration. If we add Regulation 11 (b) to Regulation 12 the combined effect is to say that the Local Government Commission cannot produce solutions to the problems in the area it is investigating, as that is a complete impossibility. The development plan says, "So far, no farther". There is to be no more building in those areas, but the problems of Staffordshire, Worcestershire and Warwickshire and all the considerations in Regulation 7 have to be taken into account, and they are impossible of solution.
I hope very much that when carrying out its duties under Regulation 12 the Commission will make an early assessment of the problems, the likelihood of the local authorities being able to produce a sensible solution to them, and will recommend to the Minister that he should extend the boundaries in accordance with the power that he has under the Act.
My hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) made the very pertinent point that we cannot look at any of these areas in isolation. Whatever change is recommended in one area is bound to have an effect upon other areas. Those of us who do not want to see the boundaries of large towns widened, or the green belt violated, nevertheless realise that as the Regulations have been framed, unless the Commission uses its special power in Regulation 12, no solution to this problem will be found.
I said in Committee, and it can be repeated now, that although I am not anxious to see the boundaries of Birmingham extended, the Regulations and the Act virtually force the Birmingham City Council into a position in which it has to recommend boundary extensions to the city. No doubt under paragraph 11 the council will be giving evidence and recommending extensions of boundaries, part of which will have the effect of encroaching on the area of my hon. Friend the Member for Meriden and other hon. Members.
That is the almost inescapable position in which the Minister has put the City of Birmingham, and I hope even at this late hour we shall take advantage of the


one gate still left open—that of Regulation 12. I hope that when the Commission studies the facts and realises the effects of not offering a solution for the large towns in the existing conurbations it will take the sensible and practical course of coming to the Minister as quickly as possible and saying, "You must extend this area in the name of preserving the green belt, while, at the same time, bringing hope to the homeless, and you must redistribute industry on a sensible basis."

7.42 p.m.

Mr. G. W. Reynolds: I want, first, to join in the expression of good will which has been offered by hon. Members on both sides of the House to the Commissions, which are now embarking on a very difficult task. The Commissions have the job of doing what might be described as a tidying-up operation in most of England and Wales, but they have very great possibilities before them in any recommendations they make for the special review areas, where their powers are considerably greater in the making of recommendations than they are in the rest of the two countries.
I feel that out of the special review areas and the regulations about them, and out of subsequent action taken in the House, we may see a new form of local government growing up—a form which we have never seen before—and that for this reason the effect will eventually spread over areas much wider than the special review areas.
May I comment on one or two Regulations, particularly Regulation 7, which has been mentioned by the Minister and by other hon. Members, and the nine principles which are set out there. Paragraph (g) refers to the
Record of administration of the local authorities concerned 
which the Commission has to take into account when it starts on its work in any area. I think that it can rightly be claimed for the vast majority of local authorities, whether large or small, county borough or county council, and even the smallest parish council, that on the whole the records of administration are good, irrespective of the political party controlling them and whether there is no political influence on them at all.
While it is right, therefore, that this provision should be included, it should

not be the overriding consideration in the mind of the Commission when looking into this matter, because, broadly, if this is to be one of the principal criteria, nearly all authorities will be able to establish a case for nothing very much being done.
Paragraph (i) refers to the "wishes of the inhabitants". It is easy to say that the Commission, or for that matter anyone else, should take into account the wishes of the inhabitants of an area. My hon. Friend the Member for Meriden (Mr. Moss) said that he thought this one of the most important provisions, and he was unhappy that, alphabetically, it came at the end of the list. I agree that it is important to take account of the wishes of the inhabitants, but, at the same time, I am not quite sure how the Commission will discover those wishes. All too often the wishes of the inhabitants as interpreted by the members of the local authority for the area are not necessarily any of the wishes and ideas which the inhabitants themselves have.
I am all in favour of accepting the fact that the elected representatives on a local authority are given the responsibility of interpreting the wishes of the inhabitants in respect of the local government of that area, but when those same representatives appear before the Commission or any other body and toll that Commission or other body what are the wishes of the inhabitants about the type of local authority they should have—whether there should be any change in the boundaries, for instance—I regret to say that in the vast majority of cases those representatives have far too many vested interests individually to be able properly to express the views of the inhabitants who, on other matters, they quite adequately represent.
On the other hand, I also feel that other bodies, organisations and individuals appearing before Commissions of this nature will probably not represent the wishes of the inhabitants as a whole, but will represent certain specific interests among the inhabitants. While I agree that this provision should be included in the Regulations, and while I am pleased to see it there, I hope that the Commission will not accept without a great deal of understanding the views which are brought forward to it by a great many bodies, both local authorities and others, which are not necessarily the wishes of


the inhabitants as a whole but often represent the wishes of a small group of inhabitants, some of whom, unfortunately, have a vested interest in the continuance of the status quo or in the continuance of the present situation without too many alterations.
Perhaps I may now turn to Regulation 8. The same point is mentioned in Regulation 11 (b). These are points for the Commission when proposing the creation of new county boroughs. The Commission is to
take into account any increase or decrease of population
and the operative words are,
within such period as they think it right to consider in the circumstances of the particular case".
I can imagine some local authorities coming to the Commission and stating that in about fifteen or twenty years' time they expect to have a population of 110,00, despite the fact that they now have only 75,000, and I can see them trying to substantiate a case for county borough status on a forward look covering a very long period. No specific period of years which the Commission should take into account is mentioned in the Regulations, and I do not for one minute think that it would be possible to mention a specific period in the Regulations, but I express the hope that, when operating, the Commission will bear in mind that—as I interpret other Sections of the Act—in county reviews it is expected to look forward only about ten years, because after ten years, if he so desires and thinks necessary, the Minister can ask the county to carry out another review.
I think that about ten years is the maximum forward look which the Commission ought to take when considering the various points mentioned in Regulation 8 and Regulation 11 (b). It would be dangerous to look very much further forward than that, unless the circumstances are particularly exceptional in any area, although I fully realise the difficulty about prescribing the number of years in the Regulations.
Regulation 11 (b) shows some of the dangers of county borough extensions. There are far too many county boroughs—my hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell)

has already given some indication of this—who are waiting for the opportunity to get their hands on neighbouring bits of land which often have been designated as green belt. I think it is essential for the Commission to bear in mind that all too often, when a county borough wants to absorb a neighbouring area, its main reason for doing so is to enable it to build.
I am glad that my hon. Friend reminded the Commission that in looking at any such question it should bear in mind whether the land has been designated for building, for green belt or for any other purposes. At the same time, I have a certain amount of sympathy with my hon. Friend, who mentioned the problem in the area surrounding Birmingham, where a vast amount of land is scheduled as not being fit or suitable for building operations.
Regulation 12 has caused some discussion between my hon. Friends. I am exceedingly pleased that the Minister has drawn the Commission's attention to the fact that its first job should be to look at the question of its area. I place a completely different interpretation on Section 25 (1) to that placed on it by my hon. Friend the Member for Meriden, who seemed to think that these would be only slight alterations. I agree with my hon. Friend the Member for Perry Barr on this and I hope that in looking at these special review areas the Commission will realise that they are far too tightly drawn. I hope that it will then go to the Minister with proposals for extending the areas. I hope that if and when he receives any such proposals as those, the Minister will be prepared, without questioning too much at that stage, to accede to any such request made to him by the Commission.
All that the right hon. Gentleman is really doing is to extend the area to be considered in a special review, and does not then commit himself to any particular form of local government organisation in the extended area. As the Commission has been given this responsibility, I hope that if it asks the Minister for action under Section 25 (1) the right hon. Gentleman will accede to the request, realising, as I say, that he is not then committing himself to doing more than give the Commission the power to look at a wider area in a special review.
Regulations 15 to 18 give some of the alternative proposals that the Commission can recommend for the special review areas. Here I have to refer back, of course, to Regulation 7 about which the Minister has, quite rightly, I think, gone to some pains to point out that the various factors are in alphabetical order, and do not imply that he considers the first in the list to be more important than the last.
I hope that when the Parliamentary Secretary replies he will be able to assure us that the fact that the items mentioned in Regulations 15 to 18 are in a particular order does not imply ministerial preference for any one of them over the others. In fact, if I thought that they were placed in some sort of preferential order I could say a good deal about the part played by some of them. It is, perhaps, a pity that the Minister could not have put them in alphabetical order, as has been done with the nine factors in Regulation 7.
I must disagree with my hon. Friend the Member for Meriden about Regulation 20, which instructs the Commission to give a local authority eight weeks' notice of intention to enter upon its area to carry out a review. In the circumstances, this is not sufficient notice. In many parts, individual local authorities will be negotiating one with another right up to the last moment in order to get agreed statements to present to the Commission. Eight weeks is a satisfactory enough period to be put in the Regulations, but I hope that, while complying with them, the Commission will, wherever possible, give more than eight weeks' notice. In other words, although I do not propose that that period should be extended officially, I hope that more notice will be given wherever possible.
The Minister indicated that Regulation 16 might be used to reduce the number of county boroughs in an area. The Association of Municipal Corporations has submitted to the Royal Commission other aspects of this subject, and has argued that the London area should be split into county boroughs. I assume that under this Regulation, the Association could, if it so desired, submit special proposals to split, say, the City of Birmingham into county boroughs. That would seem to fit into its general views,

but whether or not it would be foolish enough to do so I do not know.
I congratulate the Minister on bringing forward these Regulations. I think that they are quite good. I remember the right hon. Gentleman speaking to the Annual Conference of Municipal Treasuries in Edinburgh, two years ago, when he said that he intended to be the man to deal with local government reform in England and Wales. He has had the dirty end of the stick, first, in piloting the Bill through Parliament, and now in drawing up the Regulations. In a way, I am sorry for him because, when the time comes to consider the Commission's recommendations, it will be done by a Minister from this side of the House. Nevertheless, I congratulate the Minister on what he has so far done.

7.55 p.m.

Mr. A. Blenkinsop: It is rather a pity that the very excellent series of comments made by my hon. Friend the Member for Islington, North (Mr. Reynolds) should have been heard by so few hon. Members and that, except for the very valuable contribution of the Minister, we should have had only one contribution from the other side of the Chamber. Whether or not the Parliamentary Secretary will tell us the actual date of the funeral of the party opposite I do not know, but I am sure that we will be glad to hear it if he does.
I support what has been said by several of my hon. Friends about the timetable. All authorities concerned—and, perhaps, especially the areas involved in the special reviews—want to know how soon they are likely to be approached. I know the difficulties, but it would certainly be of great value if those areas could be given some indication of the timetable as soon as possible. A number of very important developments may be held up if there is the feeling that there will shortly be a considerable change in the authorities to be in charge of the developments.
This applies to a large number of schemes relating to local authority areas. For instance, the authorities on the Tyneside are rather automatically assuming that because the Tyneside—in my view, quite properly—is placed first in the Third Schedule to the Act, the Commission will be dealing first with the Tyneside's problems. I do not think that that is the


case, but it would be of very great value to be told quickly the order in which the areas are to be dealt with.
I also agree with what has been said about some of the factors that the Commission has to take into account when holding a review, and particularly the item "wishes of the inhabitants," and the very real difficulty there is in achieving any real understanding of this point in relation to local government structure.
The term "vested interest" is, perhaps, not quite the right one, but there are the natural interests that have been established over a number of years, and many of us feel that we have a chance here even to experiment with new forms of local government. We very much hope that the Commission will not be inhibited too much by a natural desire to try to reach as wide a measure of agreement as possible.
It must be the Commission's desire to get a good deal of agreement, but what has been said this evening should indicate that it is quite hopeless to expect that, even if the Commission spends more time on this than we hope it will, it will ever achieve any kind of unanimity of view. It is, therefore, very important that the Commission should attach its proposals to clear lines of principle which will get a wide degree of intelligent support.
It is clear that the two major points to which the Commission must pay regard are, on the one hand, size in relation to efficiency of administration—that the authority should be sufficiently large to enable the services to be properly discharged—and, on the other hand, the need to have an area of such size as to provide for the possibility of contact for those living within the area.
I hope that it will be possible, within these Regulations, for the Commission to think about the contact of the local population in terms of participation at some level with the actual services being provided; that is to say, that the Commission will think in terms of a very intimate form of contact with services, while not being at all afraid of having major local authorities large enough to ensure adequate resources to discharge the very wide and responsible functions they have to carry out. It may well be that, in the future, there will be further

responsibilities which these authorities will be required to undertake.
I have one further point with regard to the timing. It is quite clear that we cannot expect reports on a matter of this character to be presented very quickly. Inevitably, the surveys will extend over a considerable period of time—I do not know how much substance there is in the suggestion about ten years—and there will be a longish period of uncertainty.
Will it be possible for the Commission, within that period, to make some kind of interim recommendations with regard to quite modest modifications of boundaries, for example, in respect of a county borough coming within the special review areas, if the Commission thought it desirable, before presenting its recommendations? We are, of course, concerned with our own areas, and there are cases which come to the minds of us all in regard to which it would be undesirable, from all points of view, if relatively modest changes in county borough boundaries were delayed for the whole period of the special review, especially since some of these areas may be late on the list and not considered for some time.

8.2 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): My right hon. Friend has, unfortunately, another appointment and he apologises to the House for his absence. He is, I know, as I am, very grateful for the favourable reception which has been accorded to these Regulations. It is quite an unusual experience for us.

Mr. Lindgren: It will not last long.

Mr. Bevins: The hon. Gentleman the Member for Islington, North (Mr. Reynolds) was good enough to compliment my right hon. Friend on one or two of his achievements, but he rather spoiled the compliment by going on to say that a Minister of another party allegiance would be in Whitehall by the time the reports came in. I am bound to say that, about 12 months ago, that was a fear felt by many of my hon. Friends on this side of the House, but we all feel very much better about it now.

Mr. Blenkinsop: No doubt the hon. Gentleman and his hon. Friends have become reconciled to it.

Mr. Bevins: I cannot possibly attempt to answer all the questions which have been put. I think that altogether about 200 have been asked. I should, however, like to refer to some of the more important ones.
The first question to which I wish to refer relates to the programme of the Local Government Commissions in England and in Wales. This matter was raised by the hon. Gentleman the Member for Wellingborough (Mr. Lindgren) and the hon. Gentleman the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop). The Act, of course, lays down that the Commission itself shall decide the sequence in which it is to deal with the various review areas, subject to Ministerial direction if the Minister so desires. Regulation 19 ensures that the Commission keeps the Minister informed of its programme. Thus, if the Minister ever felt that he ought to direct the Commission to change its programme, he would be in a position to take action in good time. As my right hon. Friend said, the present position is that the English Commission is collating the views of all local authorities about whether they think that their particular part of the country should be reviewed in advance of the rest, and, if so, why they take that view. In the light of these views from local authorities, the Commission hopes to be able to work out quite soon a programme of reviews for the coming year and, subject to the Minister's approval, to announce it by about the end of this month.
If hon. Members are interested, what the Local Government Commission actually said to the local authorities was that it would like early next year to begin the actual investigation of three review areas, but, before deciding which three areas to take first, it wanted to know whether there were any parts of the country where the local authorities themselves considered the need for review to be particularly urgent. The letter went on to say,
If your council consider that their part of the country is in this category, they should indicate this by letter to reach the Commission not later than 16th December.
As I say, that process is now going on, and things will begin to take shape before the year is out.
The Commission will start by taking on three sizeable review areas next year, in the hope that its decisions on the major

pattern of those areas can be reached, or, at least, can be within sight, by the autumn or the end of 1959. The task will go on. I do not imagine—my right hon. Friend also has said this publicly—that the task will be completed in less than five years, but, as hon. Gentlemen know very well, it is not a question of waiting for all the reports and recommendations to come in. They will be flowing in as from some point next year almost continually and action will be taken by my right hon. Friend and by Parliament.
The hon. Gentleman the Member for Stockton-on-Tees (Mr. Chetwynd) asked whether it would be possible for the Commission to hive itself off, as it were, and look at certain areas of the country simultaneously, considering more than one area at the same time. This is possible, but when it comes to making a report and recommendation, that, quite clearly, will be, as it ought to be, the report and recommendation of the full Commission. All the machinery for that is provided under the Fourth Schedule to the Act.
The hon. Member for Wellingborough put one or two questions which I think I ought to touch upon. He asked whether the Minister would have to present the Commission's report to Parliament when he makes his Order. I assure the hon. Gentleman that the answer to that question, is "Yes"; my right hon. Friend is required to do so by Section 23 (3) of the Act. The hon. Gentleman asked also about the Minister's power to give directions. When the Minister gives directions, he asked, will the House haves an opportunity of commenting upon them, and will the local authority associations be consulted?
It is not easy to give a general answer to a question of this kind, as the hon. Gentleman will appreciate, because, in the main, the power to give directions is confined to such things as the order in which the reviews are to be carried out, whether a report on a particular area should be presented in two or more documents, and so on. Generally speaking, this power relates to particular local issues, and I do not think that it would be appropriate in such cases to consult the local authority associations. So far as the more important kind of directions are concerned, such as those affecting changes in special review areas under


Section 25, there is explicit provision that the Minister must consult the local authorities concerned.
The hon. Member for Brecon and Radnor (Mr. Watkins) had something to say about the Welsh Commission. He wanted to know how the matter would develop in the Principality. What I have said about England, of course, applies almost completely to Wales. The procedure of the Local Government Commission for Wales will follow a parallel course. As the hon. Gentleman knows, my right hon. Friend is most anxious to complete the task of setting up the Commission for Wales at the earliest possible moment.

Mr. Watkins: Except that there are no special review areas to be considered in Wales.

Mr. Bevins: Quite so; but I do not think that that fundamentally affects the position. The hon. Gentleman also raised the question of trends of rural depopulation and asked whether they would he taken into account. I assure him that Regulation 4 has been so drafted to take that sort of factor into account.
My hon. Friend the Member for the City of Chester (Mr. Temple) asked whether the Commission, when considering a county partly in a special review area, will also carry out a review of the county districts in the part of the county that lies outside the special review area. What my right hon. Friend said earlier was that we expect that when the Commission reviews a special review area it will at about the same time deal with another review area, including the surrounding county areas. As my hon. Friend knows, Regulation 14 makes it fairly clear that the Commission is not to reach a final conclusion—and this is the point—on a special review area which includes only part of an administrative county without at least looking at the review area that contains the rest of the county. If my hon. Friend looks at the form of words in the OFFICIAL REPORT, I am sure that he will be satisfied on that point.
The hon. Member for Meriden (Mr. Moss) asked me a vast number of questions, some of which I will touch upon. One question was whether Regulation 12 involves a departure from the earlier

undertaking that Section 25 would be used only for small variations of a special review area. As I say, that is in Section 25 of the Act. The important point to bear in mind is that Section 25 (2) reads
If for the purposes of their review of a special review area it appears to the Commission expedient that the whole or any part of a county district adjoining the special review area …
and so on. It is limited by the wording of the Act to an adjoining county district or part of a county district that adjoins. That undertaking, which is in the Act, still stands.
What about overspill? I will not get sandwiched between the hon. Member for Meriden and his hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell), but I should like to reiterate that the duties of the Commission will not be concerned primarily with the future housing needs of Birmingham or any other municipality. The Commission is in no sense a planning authority. But it can certainly propose a joint housing board, or a joint planning board, for that matter. I can think of many circumstances in which a joint planning board would be a vast improvement on our present pattern of local government.

Mr. Sparks: Is the hon. Gentleman now saying that the Commission will have no regard for the efficiency of local government services?

Mr. Bevins: I am not saying anything of the sort. What I am saying is that the Commission will not be influenced primarily by questions of housing need or overspill. That has been repeated over and over again by my right hon. Friend.
What I was saying was that the Commission can certainly propose a joint housing board or a joint board covering any function if it thinks that good grounds are established for doing so. Such a joint board, by the terms of the Act, can extend to some extent beyond the ambit of the special review area if that is thought necessary.
I was asked by the hon. Gentleman about the wishes of the inhabitants, the factor which comes at the tail end of the nine factors. I assure him that that is purely an accident. We certainly think that the wishes of the inhabitants are very important, but this accident is solely because of the alphabet, which I am quite powerless to change.
I was asked whether, if the Commission decided that rural parts of Warwickshire should be taken into the urban area of the West Midlands, it would bear this blow to Warwickshire in mind when it is considering Coventry's ambitions for expansion. The answer is "Yes", because no change will be considered in isolation under the legislation. The total effects of all these matters have to be assessed.
The hon. Member for Stockton-on-Tees asked whether eight weeks' notice of an impending review was too long. I say to the hon. Gentleman, who I think expressed the opposite view, that if anything we have erred the other way. We certainly think that eight weeks' notice is not too long. Do the nine factors always have to apply? They have to apply where they are relevant in the circumstances. We were also asked whether the Minister would keep Parliament informed of the programmes as they develop. Again, the answer is "Yes", and there will be plenty of opportunity for Parliament to get to know how the programmes are shaping and developing. If any hon. Member opposite, or indeed on this side of the House, wants to know how they are developing, there is no inhibition from putting down a Parliamentary Question to my right hon. Friend.
The hon. Member for Acton (Mr. Sparks) referred to the nine factors and asked about the nature of the services which local authorities have to administer. The nature of the services is a part of the circumstances and needs which I think the hon. Gentleman knows we refer to in Regulations 3 and 4 and also in the Act. I think that they are mentioned at two or three points in the Regulations, especially in association with the special review areas, but none of the factors in the Regulations are not exclusive and they do not prevent the Commission paying regard to other factors.
The hon. Member for Birmingham, All Saints, asked how the Commission could usefully act under Regulation 12 at the beginning of its review. Regulation 12 reads:
As soon as practicable after entering on the review of a special review area, …
and so on. I am assured that that means, as soon as the Commission has

found out enough to justify it in forming an opinion. The point of the wording is that the Commission should not leave the decision whether or not there should be a variation in the special review area until it is too late.
The hon. Member for Birmingham, All Saints, also asked whether Regulation 11 would have the effect of strangling county boroughs, and I think that he also felt that this Regulation was perhaps to some extent in conflict with Regulation 12. I do not think that it is. The Regulations still leave the Commission free to propose whatever it finds best for any area, whether in the interests of expansion or restriction, according to local circumstances.
I should say to the hon. Member for Islington, North that there is no significance in the order of the alternative courses set out for the special review areas in the sequence given in page 3 of the Statutory Instrument. He also made the point that the Commission would have to be careful in the weight that it attached to the views which it received from certain citizens and local organisations in undertaking its reviews. I think that the implication was that certain people might have axes of one sort or another to grind. No doubt that is true. Let us be frank that in a matter of this sort, although we are all primarily concerned with improving the effectiveness and efficiency of local government, very few of us can put our hands on our hearts and say that our views are not coloured to some extent by considerations which are extraneous to that principal consideration. I am sure that the members of the Commission will be sufficiently wide awake—I am sure that they are sufficiently intelligent—to have regard to those possibilities.
In conclusion, the Government and my right hon. Friend are confident that if the Commissions follow both the letter and spirit of the Regulations they can be assured of the support of the Government and Parliament. The Commissions are being offered this guidance, not in order to hamper them, but to help and strengthen them in what will be a difficult but nevertheless, we hope, very worth while task. With those remarks, I commend the Regulations to the House.

Mr. Sparks: Can the Parliamentary Secretary cast some light on this question?


The Commissions undoubtedly will report in due course. They will be reporting upon the creation of new local government structures, including, as the hon. Gentleman said, joint boards as well as other bodies. Are the Commissions empowered to set down the constitution for these new bodies that their reports may create, based either upon the elected or the nominated principle, or jointly? The Commissions will presumably recommend to Parliament the creation of new bodies, some of which are at present unknown to us in local government experience. Whether they are to be elected, nominated or a combination of the two, their constitution is an important matter. Are the Commissions empowered precisely to do this? Is it one of their functions?

Mr. Bevins: I speak subject to correction, but the provision in the Act, I think, is that in cases where a joint board is recommended by the Commission—this is only commonsense—it would state what it thought the constitution and representation of the joint board should be. It would make nonsense of the conception of a joint board in any locality if the Commission simply made a bald recommendation without having any authority to deal with its constitution.

question put and agreed to.

Resolved,
That the Local Government Commission Regulations, 1958. dated 21st November, 1958, a copy of which was laid before this House on 25th November, be approved.

INTERNATIONAL SUGAR COUNCIL (IMMUNITIES AND PRIVILEGES)

8.22 p.m.

The Joint Under-Secretary of State for Foreign Affairs (Mr. John Profumo): I beg to move,
That an humble Address be presented to Her Majesty, praying that the International Sugar Council (Immunities and Privileges) Order, 1958, be made in the form of the draft laid before this House on 26th November.
I have been a member of the House long enough to realise what a keen interest hon. Members take in questions of immunity and privileges. Furthermore, I know well that when I see the right hon. and learned Member for Newport (Sir F. Soskice) in his place it behoves one to be more than usually precise. I

should like to say a word or two of explanation about the Order.
The International Sugar Agreement, 1953, expires at the end of this year and Her Majesty's Government and the other Governments concerned have concluded a new and very good Agreement, which was laid before Parliament on 20th November. We hope that this Agreement can come into force next January. It is almost similar in every respect to the previous one.
The only difference concerning privileges and immunities is in Article 38 (6), which replaces the word "funds" in the original Agreement with the words "assets, income and other property". This has made necessary a small amendment in Article 3 of the International Sugar Council Order, which is already in force. The only practical effect of this change will be to confer on the Sugar Council a partial exemption from municipal rating charges on its London offices, similar to that accorded in respect of the official premises of diplomatic missions. No new personal reliefs or exemptions are involved or, indeed, contemplated.
All that we are doing is simply to take this opportunity of bringing the arrangements for the Sugar Council in London into line with other commodity councils. The proposed amendment in Article 38 (6) of the new Agreement, which is reflected in Article 3 of tonight's Order, gives effect to this.

8.24 p.m.

Sir Frank Soskice: I am glad to have this opportunity of welcoming the Joint Under-Secretary of State for Foreign Affairs to the Front Bench on the occasion of his first speaking since taking up his new appointment. The hon. Gentleman certainly has not been lacking in precision. His address was a model of lucidity and precision and seemed to me somewhat to highlight Horace's famous line about the mountains labouring and a mouse being born.
This modest little mouse is a piece of business which rounds off an evening's debate which, perhaps, can be said not to have been remarkable for its forensic thrills. I do not imagine that the House is galvanised with any particularly electric feeling at learning that the existing Order is being changed in the particular which the Minister has described.
The Order, although not stimulating the House to any unusual degree of effervescence, certainly has introduced into the proceedings a tone of mystery. When one looks at the Order, it is difficult to discover why this small change in the municipal rating of the premises of the Sugar Council is achieved by Article 3 of the Order. I certainly accept at once from the Minister that that is its effect.
Paragraph 3 states:
The Council shall have the like exemption or relief from taxes and rates, other than taxes on the importation of goods, as is accorded to a foreign sovereign Power.
By some process of ratiocination which is difficult to discern under the somewhat arid words of that Article, no doubt one reaches the desirable bourne which the hon. Gentleman has indicated as having been attained by this new Order.
As the Joint Under-Secretary has said, Members on both sides of the House are always anxious to ensure that when any new immunities are conferred there is a just and reasonable case for them. That issue does not arise in this debate, because the question whether the members of the Sugar Council should be accorded special immunities has, in effect, been decided by the House in passing the previous Order which the present one replaces.
As the Minister has said, all that the Order does is to give effect to a change in the wording of what was Article 38 (6) of the old Order and becomes a slightly changed Article 38 (6) of the new Order. "Funds" in the old Order becomes "assets, income and other property" in the new Order. Exactly what the difference is, I do not know. "Funds" would have seemed to me to be a general comprehensive term. I cannot imagine income which does not constitute funds. Assets might be assets which fall outside the scope of the word "funds".
However that may be, I do not think that it would be profitable or of interest to the House to prod more deeply into the precise minutiae of the substituted phrase. Speaking for myself and, I believe, for my right hon. Friends on this side, we have no objection to change which the Minister seeks to introduce by his new Order.

Question put and agreed to.

Resolved,
That an humble Address be presented to Her Majesty, praying that the International Sugar Council (Immunities and Privileges) Order, 1958, be made in the form of the draft laid before this House on 26th November.

To be presented by Privy Councillors or Members of Her Majesty's Household.

EAST ANGLIAN HOSPITAL BOARD (BUILDER'S CLAIM)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. R. Chichester-Clark.]

8.29 p.m.

Mr. W. T. Aitken: I am grateful for this opportunity of raising the case of Mr. Harvey Frost, who is head of a well-known and reputable firm of builders in Bury St. Edmunds. In July, 1951, Mr. Frost entered into a contract for the reconstruction of the West Suffolk Hospital which had been severely damaged by fire in 1949.
In July, 1951, Mr. Frost started his reconstruction work. For many years Mr. Frost's firm had carried out most of the expansion programme of this very well-known and highly efficient hospital, but the task of reconstruction turned out to be a very lengthy and difficult job, partly because of the necessity of doing reconstruction whilst part of the hospital was still in use, but also because as the work proceeded the contractors found that the foundations of the external walls had been badly built by the original builders over 100 years ago. The foundations and the load-bearing cavity walls of the hospital were quite inadequate to support the weight of the new construction.
For this reason, and perhaps because the hospital authorities had rushed ahead a little with the reconstruction, in other words, because the architectural planning had not been properly done, a large number of variation orders had to be issued. But the work was finally completed in the spring of 1955. At that time, after many interim payments had been made, the East Anglian Hospital Board owed Mr. Frost about £17,000. It was quite clear to Mr. Frost and his advisers at that time that there would be considerable delay in obtaining the whole of this final payment from the Hospital Board.
To avoid the possibility of having recourse to full-scale arbitration, which is always provided for in this kind of contract but is a lengthy and expensive business especially for a person who loses the arbitration, Mr. Frost invoked part of the clause which compels hospital authorities to bring out a final bill for variation. The reason why he wanted the bill to be made out as quickly as possible was that he realised that the architect employed by the Hospital Board, who was responsible for the final bill, had issued so many variation orders in the course of reconstruction work that it was obvious that the task of preparing the bill would be a very complicated and involved one.
It turned out to be so, because the small architectural staff of the hospital found it a task quite beyond their powers. Two years later, therefore, the final bill had not been completed and the West Suffolk Regional Hospital Board called in an outside firm of quantity surveyors to prepare this bill. Mr. Frost, realising that this was an expensive matter for the Board, offered to settle on a basis which would be very much in line with the original competitive nature of the contract. The Board agreed to his suggestion and Colonel Ackland, an eminent local quantity surveyor, who, I am sorry to say, has since died, was specially appointed by the Board to produce a figure for settlement.
Colonel Ackland produced his report in October, 1957, and in it he proposed that Mr. Frost should be paid, in addition to the amounts already paid to him, a sum of about £9,000. Mr. Frost agreed to accept this settlement, subject to the inclusion of an interest payment on the money which had been so long overdue to him. In fact, this sum of £9.000, plus the accrued interest, was almost exactly what Mr. Frost had estimated to the quantity surveyor as the amount due to him., because it was only at that time that he had seen the final bill for variations.
The Board proposed that Colonel Ackland should make a separate report on making interest payments on sums overdue to Mr. Frost. In this report, Colonel Ackland advised that the interest at the rate he specified should be

accepted by the Board as part of the agreed settlement.
It is clear from the correspondence between the Board and Mr. Frost's solicitors that the Board was prepared to include an interest payment. The amount, by this time, had reached £1,900. Under the several limitations of expenditure which are imposed on hospital boards by the Ministry of Health, permission must first be sought to make such payments, particularly one like this, so that the Board, having admitted the liability to pay interest as part of the settlement with Mr. Frost, quite properly sought permission from the Ministry of Health to make the payment.
The Ministry of Health refused its permission and since that time has endeavoured to make a settlement with Mr. Frost. The first offer was of £500 and we had some reason to believe from the information Mr. Frost obtained that it would be prepared to go even higher. After further discussion with the secretary of the Hospital Board, it was clearly evident that the Board felt that it had some obligation to pay this rate of interest. I do not think—and I hope that my hon. Friend will not argue—that there was any responsibility for this delay on the part of Mr. Frost, because if there was, the practice of splitting the difference might have some justification. It seems to me to be quite clear that the mere fact that Colonel Ackland, the unofficial arbitrator, had accepted the fact that there was a case for payment of interest would indicate that Mr. Frost was not responsible in any way for the delays over payment.
My object in raising this matter in the House is not entirely for the purpose of trying to get another £900 or so for my constituent. There is an important question of principle involved, a question of principle about which Mr. Frost feels very keenly. I know that his federation, the National Federation of Building Trades Employers, also feels strongly about it. I am bound to say, on the facts as I understand them, that I am very much in agreement with Mr. Frost and that Federation.
First, there were long delays in payment which were not the fault of, or caused in any way by, the contractors. These delays can have a serious effect


on any contractor, and indeed on many other forms of business. Their working capital position was affected, a position which was intensified by the recent credit restrictions imposed by Her Majesty's Government. In fact, the Treasury, the Ministry or the Board have imposed an unnecessary hardship on the contractors and, also, are clearly making a profit at their expense. It is not the fault of Mr. Frost or the firm which the Hospital Board engaged that this situation has arisen. It is entirely the responsibility of the Ministry of Health.
I am sure that if any other business had delayed payments to a firm of contractors for such a length of time they would certainly have been placed in the courts, and under the Law Reform Act of 1935 any court or an arbitrator can include an allowance for interest in judgment. I do not consider that it is either fair or reasonable for the Minister of Health to repudiate an obligation—and there is a very good case for saying that there is an obligation—of the Hospital Board.
This was an overall settlement which could have been agreed between Mr. Frost and the Board. I find it a little surprising, as the contract was with the Board and not with the Ministry, that it does not seem to have been realised by the Ministry that this settlement was arrived at partly, and probably mainly, because of Mr. Frost's desire to assist the Hospital Board. Certainly, if Colonel Ackland had been an official arbitrator in this business he would have been entitled to award interest as part of the overall settlement—at least, as far as I have been able to understand the correspondence. If that had been the case, the Ministry could not have challenged the decision, as it has done.
I hope that the Minister will make a much more thorough investigation of this case than appears to have been done. Mr. Frost has offered on more than one occasion to attend on the Minister's representatives. I am convinced that if they were willing to see him and discuss the whole thing with him he could probably disabuse them of some of the ideas which they seem to have formed. I hope that my right hon. Friend will look into this matter very carefully, indeed. If he does, he may well save his Department and the Board a good deal of trouble, further

delay and expense, because I think that he will end by finding that he will have to accept the view of the distinguished expert who made the on-the-spot investigation which appeared to be acceptable to the Board.

8.42 p.m.

The Parliamentary Secretary to the Ministry of Health (Mr. Richard Thompson): I am obliged to my hon. Friend the Member for Bury St. Edmunds (Mr. Aitken) for raising this matter since, apart from its obvious constituency interest, it involves certain matters of principle to which I want to refer. My hon. Friend has stated the history of this affair quite clearly, so I do not propose to go over that ground again at any length.
Of the 10 tenders received for the repair of the West Suffolk Hospital, Mr. Harvey Frost's, at £88,794, was the lowest and was accepted. It is true that at that time the completion of the contract was stated to be 50 weeks, although in the event it took three and half times as long. However, I imply no criticism of the contractor, because I fully accept my hon. Friend's account of this matter, which showed that many difficulties arose during the course of the work—additional work was involved and there was the reinforcement of piers, renewal of defective timber, eradication of dry rot, and matters of that kind.
In the end, the East Anglian Hospital Board paid the contractor £138,937 13s. 10d., which was much more than the original contract, about 60 per cent. more, but, even so, less than the contractor claimed. Two years' negotiations ensued between the Board and Mr. Frost to try to achieve a settlement of the additional amount which he was claiming. At one time, he proposed that the settlement should be on a cost-plus basis and not on the original contract terms. The Board was right to turn that down because, after all, the contract had been awarded originally on competitive tendering and the Board could not ignore that.
As my hon. Friend said, in August, 1956, Mr. Frost gave formal notice of arbitration, and subsequently the parties agreed to submit the matter to the late Colonel Ackland, and to ask him to act, as an adviser to both sides, a kind of unofficial arbitrator. Colonel Ackland


considered the revised contractor's claim for £20,213 and concluded that a sum of £9,224 should be paid extra-contractually, in full settlement.

Mr. Aitken: The difference between the £20,000 and the £9,000 arose because Mr. Frost saw the final bill of variation some time after he had made his original claim for £23,000, so that he could not know what the costs were until he saw the final bill of variation. That is why he accepted the difference between £23,000 and £9,000.

Mr. Thompson: I am obliged to my hon. Friend. Whatever may be the reason for the difference, it is certain that a sum of £9,224 was Colonel Ackland's proposal for full settlement.
I have refreshed my recollection of this matter by looking at copies of the original documents, and I want to say that at this stage in Colonel Ackland's original report no mention of interest was made. This is of great importance, because the dispute revolves round the interest charged; that is the gravamen of my hon. Friend's remarks. Mr. Frost contended that Colonel Ackland's report should have contained an award of interest on any sum agreed as payable. He did not at that time accept all Colonel Ackland's conclusions, or the sum of £9,224 as an adequate award; he maintained throughout that any sum due to him should carry interest, and my hon. Friend has made an eloquent and effective plea for admitting the claim.
I wish it were as simple as that. I had better say what is the Government view and the usual procedure in this kind of case. Where a Government Department, through its own fault or the fault of another Government Department, fails to make payment on a due date, or unreasonably withholds payment, that Department is authorised by the Treasury to pay interest as from three months after the creditor has established his claim. The amount of interest is determined by negotiation and in practice does not normally exceed the current Bank Rate. This procedure must equally apply to regional hospital boards acting on behalf of the Ministry of Health.
The criterion of payment is unjustifiable delay by the Government or their agents. I do not think that one can claim—as I have seen suggested in some

of the correspondence in this matter—that the Government have been sitting on the money and deriving benefit from it and using it. Next to no profit accrues to the Government because in these matters the Government themselves have to borrow in order to settle the claim.
The failure to reach agreement up to the time of Colonel Ackland's award was not in my view due solely to the actions of the Hospital Board or of Government Departments, although I recognise and accept that some delay was due to staff shortage at the Board. The board obviously has an unmistakable duty not to pay out large sums of public money without the most detailed inquiry, and it must limit the payments it makes to what is strictly due. Colonel Ackland's award amounted to roughly half the claim—which to my mind suggests that the Board's cautious approach was justified. In saying that. I want to make it clear that I am not necessarily imputing any blame to either party to this dispute, because in my view—and I realise that I differ from my hon. Friend here—the responsibility for delay both in the building work and in the determination and settling of the account cannot be said to be any one person's fault alone, or be laid at the door of one person or Department.
The suggestion has been made that the payment of interest should inevitably and automatically follow from Colonel Ackland's expressed view as an unofficial arbitrator on this matter. Surely what matters is what Colonel Ackland did award, not what he might have awarded.
Although, strictly speaking, Colonel Ackland was an adviser, he was called in to try to secure agreement without recourse to official arbitration. I ought, perhaps, to say a word on the legal aspects of this matter, as I am advised. A distinction is drawn in law between interest in respect of any period between the time when the liability rose and the date of the arbitrator's award, and interest in respect of any period after the arbitrator's award. As regards interest for the earlier period, the Court of Appeal has held that an arbitrator has the same powers as are given to a Court by Section 3 of the Law Reform (Miscellaneous Provisions) Act, 1934, and may include interest at such rate as he thinks fit on the whole or any part of the debt


or damages for the whole, or any part of the period between the date when the cause of action arose and the date of the judgment.
It will be noted that the inclusion of interest is wholly discretionary as to whether there should be any, or at what rate, or on what amount or for what period. It cannot be argued that a person in Colonel Ackland's position, in so far as he was acting as an arbitrator, would necessarily allow full interest without consideration of all the circumstances and the actions of both parties.
The position as regards the period subsequent to the award is quite different. Section 20 of the Arbitration Act, 1950 states that
A sum directed to be paid by an award shall, unless the award otherwise directs, carry interest as from the date of the award and at the same rate as a judgment debt.
We should certainly think it unusual for an arbitrator to direct that an award should not carry interest after it was made, and in subsequent offers to Mr. Frost to settle his claim, a sum in respect of such interest has been included.
What was Colonel Ackland's view on this all-important matter of interest? It is not quite so simple as has been suggested. Unhappily, as my hon. Friend said, he is now dead so we can only judge from his written comments which have been equally available to both parties. The original award recommended payment of £9,224 in full settlement, and made no mention of interest. That was in October, 1957. In a letter of 4th October, 1957, Mr. Frost claimed entitlement to interest at whatever sum was finally agreed as payable from the date when it would have become payable under the contract. After a meeting of the interested parties, Colonel Ackland reconsidered the question of interest and, in a further letter to the Board, stated that if payment of interest were acceptable and he suggested that it would be appropriate in this case, £1,883 14s. 3d. subject to some minor adjustment, should be added to the account.
This was not Colonel Ackland's last word. On 5th December, 1957, he wrote to the Board to the effect that there might be some force in the argument that, as the matter had been the subject of negotiation, the interest might be divided between the parties. He suggested that dates

should be agreed with the contractor as to when negotiations on the claim took place.

Mr. Aitken: May I ask whether the implication is that Mr. Frost was responsible for part of the delay in the payment? Is that the implication which my hon. Friend assumes from Colonel Ackland's last letter?

Mr. Thompson: The assumption I make from the letter, and from my reading of the quite voluminous papers in this case, is that it is not possible to apportion the whole of the blame for the delays which occurred in this matter to the actions of the Ministry of Health or the Hospital Board. My reading of it is that at the end of the day he came to the conclusion that there had been delays on both sides, but he did not specify the precise proportion.
Colonel Ackland's final view on the matter agrees with the view of the Government in such cases where precise responsibility for delay is indeterminable. Nor could we say to what extent the delay was inevitable or unjustifiable. In such circumstances it seems practically impossible to assess an identifiable rate of interest on an identifiable amount for an identifiable period. I should think that the negotiations ought to be started with the contractor for some payment reflecting, so far as possible, a proportion of responsibility for unjustifiable delay attributable to the Department or its agents. That is what we are trying to do, and I hope that after the useful discussion we have had this evening we may come to some agreement on this matter.
On the view that something was due to Mr. Frost in connection with delays in payment for which we and the Board take some responsibility, £500 was offered in settlement in July, 1958. When this proved unacceptable the Board was empowered—this was after my hon. Friend's letter to me—to negotiate further up to a limit of £1,000, which is slightly more than half the total claim. We then thought that Mr. Frost might be prepared to negotiate and I regretted it when the offer was turned down and the claim was restated that interest should be payable in full from the date of the completion of the work.
I must repeat—perhaps I differ here from my hon. Friend—that this principle is not acceptable, and the only settlement that I could agree to would be one reached by negotiation based on some proportion of the sum claimed. I understand the difficulties in reaching such an agreement and I hope I have made clear that there is no thought in my mind of denying all responsibility or apportioning blame in this matter. I hope that the discussions we have had this evening will open the way for Mr. Frost to accept the offer the Board has been authorised to make.
I can say at once that if it would be helpful in this matter for officers of my Department to see Mr. Frost and have a further talk about this, I will gladly see that such a meeting is arranged soon. If such a meeting takes place with a fruitful result, I think my hon. Friend may feel that his initiative in raising this matter with all its important implications, has certainly not been wasted.

Question put and agreed to

Adjourned accordingly at one minute to Nine o'clock.